VILNIUS - Prime Minister Algirdas Brazauskas has said that the government is holding negotiations on the Mazeikiu oil refinery with three potential investors simultaneously, including two major Russian oil producers who dropped out of the process last year. Brazauskas confirmed that government officials were holding talks with three companies 's Lukoil, TNK-BP, a Russian-British joint venture, and KazMunayGaz, a Kazakhstan state-run oil and gas company 's on acquiring a controlling stake in Mazeikiu Nafta, the largest enterprise in Lithuania and the only oil refinery in the Baltic states.
News that Lukoil and TNK-BP, two of four original bidders for the asset, were back at the negotiating table caused a minor sensation in Lithuania, since the presence of familiar, big-name companies holds out hope for a sweet deal. Late last year Lukoil and TNK-BP backed out of the process, saying Yukos was asking too much money for the stake.
TNK-BP reportedly bid some $600 million for the stake, while Lukoil offered some $980 million in consortium with U.S.-based ConocoPhillips.
Speaking in a radio interview, Lukoil Baltija CEO Ivan Paleichik said, "I would just say that our offer will be better compared with other companies. We have the assurances of crude supply, and this is the key advantage of Lukoil. No other company that also seeks to acquire the Mazeikiai company could offer such guarantees.
He added, "Lukoil can implement all requirements imposed by the government. However, we will not agree to acquire the shares at any price."
Meanwhile, the Lietuvos Rytas daily reported that Brazauskas was not favoring Lukoil as the ultimate buyer. The prime minister reportedly prefers KazMunayGaz. In one of its reports, government analysts apparently claimed that the sale of Mazeikiu Nafta to Lukoil or Gazprom, both loyal to the Kremlin, could pose a threat to national security.
Rimantas Stanikunas, head of Lithuania's Competition Council, said previously that Lukoil could not operate Mazeikiu Nafta even in consortium with an American company, since the Russian company would gain dominance on the petroleum product market in that case.
For his part, Brazauskas said the withdrawal and resumption of talks by Lukoil was a natural thing.
"There are three applicants eager to acquire these shares. We have specific applicants that have offered very precise amounts that are similar," Brazauskas told national radio. "Undoubtedly, this is very good since Lithuania aims to acquire the shares from Yukos and eliminate the liabilities dating back to 1999 that are unnecessary for us."
Indeed, talks between the state and Yukos, the floundering Russian company that owns a 53.7 percent stake in Mazeikiu Nafta, have run into a cul-de-sac, as Yukos executives try to extract a maximum price and Lithuanian ministers eke out a deal that would allow the state to buy the stake then turn around and sell it to the investor with the most attractive offer.
But the two sides recently agreed on a price for the 53.7 percent stake - $1.2 billion. What's more, Yukos will receive dividends from the refinery's 2005 earnings.
Talks might be finalized this week, according to reports.
