Kazakh is set to arrive for resumption of talks

  • 2006-05-03
  • Staff and wire reports
VILNIUS - The government is set to renew talks with potential buyers of the oil refinery Mazeikiu Nafta, with a delegation from Kazakhstan's KazMunayGaz expected to arrive in Vilnius on May 3. KazMunayGaz is widely regarded as having the strongest position to take over Lithuania's refinery. The company, which is state-owned, owns vast upstream resources and has even suggested that Lithuania could partake in a joint venture to produce crude oil in the Central Asian country.

Economy Minister Kestutis Dauksys said that the government's negotiators met with representatives of Poland's PNK Orlen in London last week.
PKN Orlen has reportedly offered to pay $2.5 billion for a 94 percent stake in the crude refining and transportation complex. The Polish company is not considered a favorite since it currently does not have any crude oil production capacities.
KazMunayGaz initially offered $1.2 billion for Yukos' 53.7 percent stake in Mazeikiu Nafta, and said it was prepared to buy a 20 percent stake from the government. It is possible that the Kazakhs will revise their offer in light of PKN Orlen's new bid.
Meanwhile, a U.S. court in New York is expected to decide on May 4 whether to lift an injunction that went into effect April 13. The ban has prevented Yukos' management from selling any shares in Mazeikiu Nafta without consent from a Moscow court-appointed supervisor of the bankrupt Russian company.
Yukos owns 53.7 percent of the refinery.

Interfax, a Russian news agency, reported that a U.S. judge said he would remove the restraining order if Yukos agreed to transfer the money to an account held by its Dutch-registered subsidiary with frozen accounts and inform the temporary administrator about the course of its negotiations with the Lithuanian government.
The judge repeatedly called on the parties to consider a possible out-of-court settlement.
Reportedly, a lawyer representing Eduard Rebgun, the temporary administrator at Yukos, made it clear that the latter would not object to a deal on the sale of Yukos' 53.7 percent stake in Mazeikiu Nafta to the Lithuanian government, which, in the lawyer's words, offered $1.5 billion for the shares.

The deal would raise the government's stake in the refinery from the current 40.66 percent to around 94 percent.
If the government bought the Yukos-held shares and reached a deal with a new strategic investor, it could sign both agreements at the same time. However, some government officials, particularly from the Labor Party, have expressed the opinion that Lithuania, if it does take over Yukos' stake, should not rush to sell the asset and instead wait to see if a better deal materializes. Prime Minister Algirdas Brazauskas has rebuked the idea.