VILNIUS - Lithuania's mission to find a strategic investor for its largest enterprise, an oil refinery and export terminal, have ground to a near halt due to a confluence of various forces, including ubiquitous creditors' claims, Kremlin browbeating and disagreement among the refinery's current owners.
Talks with both Yukos, Mazeikiu Nafta's current owner, and potential investors, have failed to produce tangible results, not least of all because each time a deal is about to be struck forces from without 's a Russian ministry or U.S. court 's manage to intervene. Worse, there is no end in sight.
Prime Minister Algirdas Brazauskas admitted last week that the situation was complicated and changing daily. "The situation is rather difficult. A system for the supervision of the liquidation of Yukos has formed in Russia, which is seriously hampering all the negotiations," he said in an interview with the Ziniu Radijas radio station on April 20.
"Our efforts to get Yukos to sign the agreement as soon as possible came to nothing," he said.
The Lithuanian government wants to purchase Yukos' 53.7 percent stake in Mazeikiu Nafta and resell it to a strategic investor. But each time a deal is close, a foreign court seems to intervene. Eduard Rebgun, a temporary court-appointed administrator for Yukos, has filed a restraining order on the sale of Yukos shares by several individual owners. The court has proposed that parties hold a meeting to consider a possible out-of-court settlement, news agencies reported.
The court postponed its hearing of the claim until April 26.
The decision of the New York bankruptcy court will be decisive for the continuation of talks on an ownership change at the refinery. "We will await the court decision due next week and get ready for it," said Nerijus Eidukevicius, deputy economy minister.
Rebgun told the court in a previous hearing that the Lithuanian government has offered $1.5 billion for Yukos' 53.7 percent stake in Mazeikiu Nafta.
At the same time the Lietuvos Rytas daily reported last week that Yukos shareholders are apparently unwilling to finalize a deal in the hope of receiving a windfall in dividend income. What's more, the company, which is systematically being dismantled by the Russian government, reportedly sees no danger that Yukos International UK might see its rights to operate the shares of Mazeikiu Nafta curbed.
Although the board of the oil company has proposed to forgo dividends, the shareholders of the company, which posted 886 million litas (256.8 million euros) in net profit for 2005, are expected to decide on the contrary. Last week, Yukos President Steven Theede told Rebgun that the concern did not control the shares in Mazeikiu Nafta.
"Yukos does not own any shares in Mazeikiu Nafta. Moreover, Yukos is not a formal owner of those shares and has no legal basis to hold the shares in Mazeikiu Nafta," Theede explained, adding that therefore Yukos managers could not take any measures to violate the ruling of Moscow arbitration since the shares of Mazeikiu Nafta were not the property of Yukos.
The controlling stake in Mazeikiu Nafta is held by Dutch-registered Yukos International UK, which is controlled by Yukos Finance, which is also registered in the Netherlands.
Meanwhile, the government continued meeting with potential buyers, though there is still no clear consensus on which company 's Poland's PKN Orlen or Kazakhstan's KazMunayGaz 's would make the best strategic investor.
Economy Minister Kestutis Dauksys met with Dias Suleymenov, head of the trading house of KazMunayGaz and Wojciech Wroblevski, advisor to the president of the Polish oil company PKN Orlen.
KazMunayGaz, which can guarantee crude oil supplies to Mazeikiu Nafta, initially offered $1.2 billion for Yukos' 53.7 percent stake, while PKN Orlen has said it was ready to pay as much as $2.55 billion for a 94.3 percent stake. However, the Polish company is not seen as a strong candidate since it does not produce crude oil and therefore, in the opinion of top Lithuanian officials, particularly Brazauskas, cannot guarantee crude oil supplies.
PKN-Orlen may hold talks with the Russian-British oil major TNK-BP over investment in Mazeikiu Nafta and oil supply guarantees, according to reports.
TNK-BP, a Russian-British joint venture that earlier had sat down at the negotiating table with the government only to back out later, was named by Minister Dauksys as a third potential investor, according to the LNK TV station.
Should talks with Yukos prove futile, the government has hinted it would nationalize the refinery. "This option, the most drastic one, is legally possible. If the situation becomes hopeless, we will have to take this measure," Brazauskas said last week.
"But it would be an extreme measure because the fate of the company itself would be very unclear. It could be a long process because, under Lithuanian and international principles, adequate compensation must be provided in case of nationalization, which means litigation," he said.
