VILNIUS - Negotiations on a deal for the sale of the Mazeikiu Nafta refinery continued fruitlessly over the past week, with government ministers seemingly spending more time denying rumors and speculation than working out a concrete agreement with Russia's Yukos. Government negotiators and Yukos executives met in Paris on April 11 to resume talks, which began in December, but have failed to conclude a deal. Lithuania is putting pressure on Yukos to sell Mazeikiu Nafta back to the state for some $1.4 billion, according to reports.
But Yukos, once Russia's largest oil producer but now a shadow of its former self, appears to be holding out for a better offer given the intense interest from KazMunayGaz, a state-owned company in Kazakhstan, and Poland's PKN Orlen. The deadlock has frustrated the Lithuanian government, as it wants to obtain a new strategic investor for Mazeikiu Nafta, which accounts for nearly 10 percent of GDP. State negotiators have even threatened to renationalize the enterprise if Yukos refuses to compromise.
Nerijus Eidukevicius, deputy economy minister and one of the state's negotiators, refused to comment on the Paris talks, as did his boss, Economy Minister Kestutis Dauksys.
Yukos President Steven Theede will represent Yukos, and a report in the Lietuvos Rytas daily this week speculated that Theede was deliberately stalling the deal so as to not anger the Kremlin. Sources in Vilnius told the paper that the two sides already agreed upon a price for the 53.7 percent stake in the refinery, but that Theede had received a "threatening letter" from Eduard Rebgun, the temporary administrator of Yukos appointed by Moscow arbitration.
Rebgun reportedly warned Theede that he would have to answer to Russian law if he sold Mazeikiu Nafta. The Moscow arbitration recently appointed a temporary administrator for the oil company and banned any sale of Yukos' foreign assets. Still, the decision would have no effect on the sale of Mazeikiu Nafta, unless approved by Dutch or Lithuanian courts.
Yukos owners are currently searching for ways to settle the matter, sources told Lietuvos Rytas.
Yukos stills owes several billion dollars in back taxes, and the Kremlin is keen to prevent any unauthorized sale of company assets, among which Mazeikiu Nafta is one of the most attractive.
But Yukos Chairman Viktor Gerashchenko told Reuters news agency that Lithuania was to blame for the delays. "I think things are being delayed deliberately as it is important for Lithuania to continue receiving crude from Russia. So if you (Russia) put some pressure on them, they will keep dragging it out," Gerashchenko was quoted as saying.
"We were due to sign a deal last Friday [March 31], with their obligation to pay $1.4 billion before May 1, but unfortunately they didn't sign the deal," he added.
Dauksys dismissed the statement. "We have not held any talks with Gerashchenko. Yukos is represented by other negotiators. This is already their internal matter," the minister said.
Meanwhile, Prime Minister Algirdas Brazauskas finally came out and admitted that Poland's PKN Orlen was not a strong candidate for Mazeikiu Nafta. "I do not think that we can hold any serious talks with the Poles as long as they [PKN Orlen] do not provide assurance for the supply of approximately 10 million tons of crude per year," Brazauskas told Parliament on April 6.
One day earlier, PKN Orlen announced that it had approached Lithuania's government with a proposal to buy a majority stake in the refinery after the government obtains it from Yukos. Brazauskas, however, denied that any such proposal had ever been obtained.
Saulius Specius, the prime minister's adviser, told the Baltic News Service that PKN Orlen had merely submitted a writ confirming its interest in the company. The writ had not outlined any proposal to buy the shares from the government, he noted.
According to unofficial sources, PKN Orlen has bid the highest price 's $1.5 billion 's for the asset. However, the company at present does not produce crude, which for Lithuanian authorities is a leading requirement.
The Lithuanian government owns a 40.7 percent stake in Mazeikiu Nafta, which include a refinery and an oil export terminal in Butinge.
