Mazeikiu negotiations continue in Israel

  • 2006-03-08
  • Staff and wire reports
VILNIUS - After unsuccessful rounds in London and Vilnius, talks on securing an ownership change at the Mazeikiu Nafta oil refinery have moved to Israel, where two key Yukos shareholders wanted for arrest in Russia are residing.


Government and Yukos negotiators are refusing to comment on the talks, which have been stuck in the mud. Saulius Specius, an adviser to Prime Minister Algirdas Brazauskas and one of Lithuania's negotiators, told the Lietuvos Rytas daily that negotiations would not be finalized any time in the near future.

Specius and Nerijus Eidukevicius, deputy economy minister, met with Mikhail Brudno and Leonid Nevzlin, both co-owners of Yukos, the Russian oil company that the Kremlin appears determined to dismantle.

"The things that are going on are not public. Any comments may harm the negotiations," Eiduke-vicius told the Verslo Zinios daily.

Brazauskas, who confirmed last week that government negotiators were holding talks in Israel, refused to speculate on possible timing for government decisions on the subject, however.

"As instructed, they are holding talks with those who should be negotiated with, that is, with Yukos management. We hope for a solution to be achieved, however, I cannot say when it will happen 's in the nearest future or later," Brazauskas said March 1.

Still, it is unclear how long the government is willing 's or can afford 's to allow the process to drag itself out. Without a clear strategic plan, Mazeikiu Nafta, the only refinery in the Baltics and Lithuania's largest corporation, will not reach its maximum output potential. At current world prices, this amounts to a lost opportunity.

According to the Baltic News Service, sources close to the Cabinet have noted that the decision over Mazeikiu Nafta would be made in the nearest future. Should Yukos refuse to sell its shares to the government, the latter would nationalize the oil complex.

In the meantime, Kazakhstan's KazMunayGaz and PKN Orlen, Poland's largest oil trader, are vying to buy the 53.7 percent stake. The government wants to buy the stake from Yukos and then sell it to the strategic investor of its choice, possibly Russia's TNK-BP or Lukoil. Both companies have vast production potential.