Dutch court recommends selling Mazeikiu refinery to cover debts

  • 2005-11-09
  • By TBT staff
VILNIUS - A Dutch court last week accepted a claim from 14 Western banks against Russia's oil company Yukos and recommended that the latter's majority stake in Mazeikiu Nafta, which is registered in the Netherlands, be sold to cancel the debt.

The Nov. 4 decision came just days after the Lithuanian government announced it was prepared to open talks with TNK-BP, a British-Russian joint venture and the second largest producer of crude oil in Russia, on a possible takeover of the Mazeikiu refinery.

It was unclear, however, how the Dutch court decision would interfere with those plans. The court was set to summon experts to ascertain details of a sale, Romualdas Kalonaitis, Lithuania's envoy to the Netherlands, told the Baltic News Service.

The court also included Yugansneftegaz, a former Yukos production subsidiary, in the list of claimants. Yugansneftegaz, which is now controlled by state-owned Rosneft, is seeking 1.3 billion euros from Yukos. The 14 Western banks, for their part, are hoping to recover almost 500 million euros. The Menatep Group, a financial group that used to own part of Yukos, has also put forward claims against the besieged oil company.

By effectively combining the lawsuits, which originate from both East and West, the court may have dealt an even more serious blow to Vilnius' plans. The Lithuanian government is hoping to obtain a new strategic investor for the refinery, the Baltic country's largest enterprise, and earn a tidy windfall from a sale of its own stock in Mazeikiu Nafta.

Prior to the court decision, Prime Minister Algirdas Brazauskas had said that the government was waiting for the Dutch court to annul seizure of the Yukos assets, which include a 53.7 percent stake in Mazeikiu Nafta. A final decision was expected on Nov. 9 after The Baltic Times went to press.

Lithuanian officials were reluctant to comment on the court's recommendation. Nerijus Eidukevicius, deputy minister of economy and chief negotiator in the refinery negotiations, said that, in principle, the court decision has changed nothing. "Nothing has changed in this legal environment so far. The seizure of Yukos' shares has remained in place. I have not seen a court decision stating the necessity to recover funds," he told the Baltic News Service.

Brazauskas did not comment on the court decision, nor on any possible reaction by the government.

Some experts have implied that the Yukos' stake in Mazeikiu Nafta might be auctioned off and that the Lithuanian government might not be allowed to bid.

Parliament has authorized the government to borrow up to $1 billion to buy Yukos' stake with the aim of turning around and selling it to a strategic investor.

That investor could be TNK-BP, though informal talks with other investors 's including Russia's Lukoil and U.S.-based ConocoPhillips 's are continuing.

Commenting on the decision to sit down with TNK-BP, Brazauskas said last week, "The success of talks will depend on numerous factors, which will be offered for consideration during the negotiations."

An official working group of negotiators for the purchase and sale of Mazeikiu Nafta would be set up in the near future, the prime minister added.

Still, there is a chance that the arrest might not be lifted on Nov. 9. Russian officials have been eager to prevent any sale of the prize refinery asset from taking place without their participation. Last month, Russian court marshals told reporters in Moscow that Yukos still owed the state over $7 billion in tax arrears and that the next step would be the seizure and sale of the oil company's assets, including those abroad.

Last week Russian President Vladimir Putin was on a state visit to the Netherlands.

Should Moscow be successful in its attempts to either buy Mazeikiu Nafta or receive the cash from a sale, the Lithuanian government would be dealt a heavy blow.

Finally, the Lietuvos Rytas daily reported this week that Sibneft, a Russian oil company recently purchased by Gazprom, the country's natural gas monopoly, has its eyes on the Mazeikiu refinery. According to the paper, Bronislovas Lubys, president of the Achemos Grupe industrial concern, is helping Sibneft in its bid. However, Lubys wants a controlling interest in a joint venture that would be established to manage the oil refinery, the paper reported.