VILNIUS - Lithuanian oil refinery Mazeikiu Nafta is to receive a two month's supply of crude via rail from Kazakhstan's KazMunayGaz, the Lietuvos Rytas daily reported on Sept. 27, further feeding media speculation about Kazakhstan's intentions and the pending sale of Mazeikiu to Poland's PKN Orlen.
The Kazakhs are to deliver 350,000 tons of crude oil to the Lithuanian refinery by rail over a two-month period, the daily reported.
"This is the first step. We are ready to supply much larger amounts (of oil) at a good price," the paper quoted a Kazakh oil business representative as saying.
However, the reasons why were a hot topic in the Lithuanian press earlier in the week, adding to the on-going controversy about Mazeikiu Nafta's deal with Poland's PKN Orlen.
Lietuvos Rytas, on Sept. 25, opined that KazMunayGaz is propping up the value of the refinery, only to dig into its deep pockets and purchase it later. KazMunayGaz has reportedly suspected that PKN Orlen does not want to pay the price agreed upon in May. If this is true, they might back out of the deal. "The Kazakhs have the money and are ready to pay it," the daily wrote.
Recent meetings between Russia's Lukoil and PKN Orlen in Moscow had fanned speculation that the Polish company was considering selling off a portion of their stake in the refinery to a Russian company after the deal goes through.
Denials surfaced from all sides about PKN Orlen planning to sell to Lukoil.
"Lukoil has had talks with the Lithuanian government to buy a stake in Mazeikiu Nafta. However, no such talks are happening at this time," Lukoil's vice-president Leonid Fedun wrote in a statement on Sept. 24.
"This speculation hasn't any grounds in reality and is aimed at undermining PKN Orlen's credibility," a company spokesman Dawid Piekarz said in a statement.
On Sept. 26, the Lithuanian Prime Minister Gediminas Kirkilas also denied the resale rumors being reported in the media. "PKN Orlen could not sell any shares in Mazeikiu Nafta to any other investor without first notifying the government," Kirkilas told the news service of Lithuanian public LTV.
PKN Orlen's Chairman Igor Chalupec met with Kirkilas on Sept. 26 to discuss the details of the EC application. However, concerns about the sale of part of the refinery to Russia's Lukoil were likely also on the agenda as well .
"I hope that it will take no more than five weeks for the European Commission to make a final decision. I believe that the transaction could be completed in late November or December," Chalupec said during a press conference after his meeting with Kirklas.
Kirkilas said that there was good news, as well as problems, but he did not elaborate.
"Some headway has been made, and today's talks made me even more certain that the deal will be successful. However, there are some details and problems, which we discussed. One of the issues is preparation to receive permission from the European Commission as to competition, and some decisions have already been made in this regard," Kirklas said, adding that all was going according to schedule.
PKN Orlen's chairman said that he intended to meet with senior executives of the Russian pipeline operator Transneft to discuss oil supplies.
Admitting that supply shortages could have been both political and technical, PKN Orlen's Chalupec stated that, "We believe that this is a technical problem. We expect Transneft to handle [these problems] in a professional manner." Adding that, "If the company fails to solve the issue of supply, that will mean problems for other companies as well."
According to Russian media sources, PKN Orlen may discuss the Lukoil possibility when it meets with Yukos bankruptcy representatives in Russia. This serves as a hint that Lithuanian and Polish interests in the refinery's future might have some kind of partnership with a Russian oil company. However, the results of the Sept. 26 meeting seem to imply otherwise.
In May and June, PKN Orlen agreed to pay 1.5 billion U.S. dollars (1.2 billion euros) for a 53.7 percent stake in Mazeikiu Nafta to Yukos, and 8.5 million dollars for 30.66 percent of the shares to the Lithuanian government. The deal has already been approved by Ukrainian and U.S. competition authorities and awaits EU commission approval before it is finalized.