VILNIUS - Government officials and Yukos executives reportedly met again in London last week in an attempt to break the deadlock over talks involving the Mazeikiu Nafta refinery, though scant information about the meeting was provided.
Judging by the subdued atmosphere after two previous rounds of talks, it would appear that last week's meeting 's on the eve of Lithuania's national holiday 's failed to produce any tangible results.
Nerijus Eidukevicius, deputy economy minister, refused to comment when contacted by reporters.
Two weeks ago Prime Minister Algirdas Brazauskas had expressed hope that the government would receive a response to its latest proposals by last week, though no information was forthcoming.
The government wants to buy the 53.7 percent stake in Mazeikiu Nafta, the Baltics' only refinery and Lithuania's largest corporation, for some $1 billion, while Yukos, which is being dismantled by Russian law enforcement authorities, wants as much cash as possible. Already two companies 's Poland's PKN Orlen and Kazakhstan's KazMunayGaz 's have offered more than the Lithuanian government, which, if successful in obtaining the stake, would turn around and sell it to a strategic investor of its choice.
The Lithuanian government holds a 40.66 percent equity interest in the refinery.
There have been reports that the government, frustrated by the talks, have threatened to nationalize the oil refinery. The two leading candidates to buy the stake from Yukos do not satisfy the government's primary requirement 's a guarantee that crude will continue flowing to the Mazeikiu refinery and that throughput is maximized.
PKN Orlen currently has no upstream operations, while KazMunayGaz is hostage to Russia's oil pipeline policies, which can be notoriously fickle.
KazMunayGaz announced officially that it was offering $1.2 billion for the Yukos-held shares and that it intended to buy a stake from the government under the same terms.
PKN Orlen, as reported by unofficial sources, bid some $1.5 billion, although its offer was conditional on meeting several legal conditions.
Before bidding began, the government had expressed a preference to begin talks with TNK-BP, a Russian-British joint venture.
Talks are also locked over two Yukos-held options 's for 21.22 percent 's to buy more shares in Mazeikiu Nafta that were part of the two sides' agreement five years ago. The government wants the options canceled, while Yukos wants to buy them on the cheap 's or for about 490 million litas (142 million euros). This is about half what the government could earn by buying Yukos' stake and selling it, along with another 20 percent stake, to a foreign investor.