Paper: Talks with Yukos not going well

  • 2006-02-08
  • By The Baltic Times
VILNIUS 's The government's negotiations with Yukos on a deal involving a controlling stake in the Mazeikiu Nafta refinery are turning out to be tougher than expected, as the moribund Russian oil corporation is reportedly unwilling to make any concessions.

The Lietuvos Rytas, Lithuania's leading daily, reported on Wednesday that sources close to the talks, which began last week in London but failed to produce results, said that Yukos executives are proceeding with one goal in mind 's namely, to sell the 53.7 percent stake in the refinery to the highest bidder.

The government, however, wants to have a say in who becomes the refinery's next owner given the problems with crude oil deliveries in the past and the Mazeikiu's Nafta significance to the Lithuanian economy (it accounts for some 10 percent of GDP).

At the least the government is hoping to negotiate a direct buyout of Yukos' stake, and for this purpose it has been empowered by Parliament to borrow up to 850 million euros on international markets.

Yukos, on the other hand, is after cash, and as much as it can get its hands on. Moscow law enforcement authorities are dead-set on dissembling the corporation, which still owes some $7 billion in tax arrears.

Currently there are two investors that Yukos is negotiating with: Poland's PKN Orlen and Kazakhstan's KazMunayGaz. While KazMunayGaz owns oil fields and has even offered Lithuania the possibility to extract crude in the Central Asian country, PKN Orlen does not produce oil. Recently, however, the Polish company announced plans to produce up to 4 million tons of oil by 2012.

Talks between Yukos and the Lithuanian government were set to resume in Vilnius on Wednesday.