VILNIUS - Mum was the word throughout the week in regards to a crucial deal on the Mazeikiu Nafta oil refinery, with both sides of the table 's the Lithuanian government and Russia's Yukos 's refraining from commentary. Government ministers admitted that talks were ongoing despite an obvious lack of progress toward a final deal.
"I'd say the talks are continuing. They haven't stopped. I can't give any details, nor can I quote from the letters we have received recently," Prime Minister Algirdas Brazauskas told reporters on Feb. 22.
"Today we once again discussed [certain issues] with the negotiating group. And steps will be made next week," he said.
The negotiations hit a dead-end three weeks ago. Yukos, which is being dismantled by the Kremlin, wants to receive as much cash as possible for its 53.7 percent stake in Mazeikiu Nafta, the Baltics' only oil refinery, while the government is hoping to pull off a complex deal that would essentially allow it to sell a controlling stake 's approximately 70 percent of outstanding shares 's to a strategic investor of its choice.
But to do that, the government must first buy the majority stake from Yukos. It wants to cancel two Yukos-held options to buy more shares in Mazeikiu Nafta, as well as abrogate some other agreements with the Russian company.
Some reports have suggested that the government, frustrated by Yukos officials' stance, threatened to nationalize the company.
Two companies, Kazakhstan's KazMunayGaz and Poland's PKN Orlen, have submitted bids for Yukos' stake. KazMunayGaz stated it offered $1.2 billion, while PKN Orlen reportedly bid up to $1.5 billion.
Meanwhile, the business daily Verslo Zinios reported last week that the government could be at fault for the gridlock, since it wants the refinery's next strategic owner to become Baltic Holding, an Austrian-registered company.
According to the paper, if Baltic Holding bought Mazeikiu Nafta, it could bring in a Russian oil company to the Lithuanian refinery. Last year Baltic Holding expressed interest in buying Mazeikiu Nafta and offered to invest around 1.16 billion euros, though it did not submit a bid when Yukos invited bids for its majority stake.
