VILNIUS - Crucial negotiations with Yukos executives over the fate of Mazeikiu Nafta are set to begin Jan. 26 in Vilnius, with Lithuanian ministers, backed by Dutch and British lawyers, hoping to win a deal that will secure both a new strategic investor for the refinery and a cash windfall for the government.
The meeting will be the first between the two sides this year and will take place just one day before final bids are to be submitted for Yukos' 53.7 percent stake in Mazeikiu Nafta, Lithuania's largest corporation. Bidders include Poland's PKN Orlen, Kazakhstan's KazMunayGaz, Russia's Lukoil and TNK-BP.
The government, however, will try to persuade Yukos to sell the stake back to the state, which will then turn around and sell it 's with an additional 20 percent interest 's to the investor of its choice. Thus, the outcome of the Jan. 26 talks could predetermine the outcome of the ongoing bidding process.
Lithuania's exact bargaining position is being worked out with the help of five Dutch and British lawyers from Barents Krans and DLA Piper Rudnick Gray Cary, which have been contracted by the Economy Ministry.
Nerijus Eidukevicius, deputy economy minister, said the cards were in Yukos' hands. "The path to a solution will depend on Yukos," he told the Baltic News Service. "We will seek to find a solution for the questions that are most important for the government 's that is, the options, agreements and the investor's quality."
The government has been empowered by Parliament to buy Yukos' stake for some 3 billion euros (869.5 million euros), funds it will have to borrow from a consortium of local and foreign banks.
Independent observers believe that Yukos might choose one of two prospective buyers that had offered the highest price for the stake 's KazMunayGaz and PKN Orlen. These two companies are to submit their final bids to Yukos on Jan. 27.
The Lithuanian government, however, has expressed an interest in proceeding with TNK-BP, a British-Russian joint venture.
PKN Orlen has reportedly claimed that it was prepared to pay almost $1.5 billion for the stake in Mazeikiu Nafta, the Baltics' only refinery, while the consortium of Russia's Lukoil and US ConocoPhillips offered $980 million, the Lietuvos Rytas daily reported Jan. 13 citing unofficial sources.
PKN Orlen President Igor Chalupiec reiterated repeatedly that the company's bid was higher than that of KazMunayGaz, Kazakhstan's stake-owned energy company. Media reports have put the latter's bid at $1.2 billion.
Meanwhile, refinery workers have begun mulling strike actions if the dispute over wages is not resolved.
Lietuvos Rytas reported this week that the refinery trade union is dissatisfied with the company's wage policy. "We think that they are maltreating us and not appreciating our work," said Virginija Vilimiene, the union's chairwoman.
The trade union has applied to the board in writing, setting out its demand to reconsider the board's decision on raising the remuneration fund. The board earlier approved an increase for fund resources by 2 percent instead of the 20 percent demanded by the union.
Company representatives have put the average monthly wages of workers in the manufacturing and other units at 2,700 litas (782.6 euros). Union officials noted that some workers' wages do not even reach half of that amount.
