Mazeikiu Nafta: English stays on as leader

  • 2006-11-16
  • By TBT staff

NOT TOO PROUD: Yukos representatives have already expressed dissatisfaction with Mazeikiu Nafta's management.

VILNIUS - The CEO of Mazeikiu Nafta, Paul Nelson English, has defended his post against a no-confidence vote as the four members of the board from Russia's Yukos walked out of the meeting and state representatives pulled a no-show.

In the lead-up to the meeting, there were reports that the four Yukos representatives were unhappy with English's management of the company and had called for his resignation accusing. According to reports, English had begun to work in the interests of the Polish company PKN Orlen, which agreed to buy an 83 percent stake in the company in May, instead of those of Mazeikiu Nafta's shareholders.

But the fateful board meeting turned out to be anticlimactic, as the three members representing the Lithuanian government chose not to attend. Government ministers had made it clear in the days prior to the Nov. 9 meeting that they were satisfied with English's performance on the job. The one Yukos representative present at the meeting, Tomas Gizhas, the company's Lithuanian representative, said that the four other Yukos members had resigned.

"We have fulfilled all of our obligations for the shareholders and the business, and we evaluate our four years of work on the board as good. Today we are putting our resignations on the table," Gizhas told journalists.According to Gizhas, Yukos representatives laid out to shareholders their proposal on what needed to be done at the company, and the answers they received reflected a position that was "more than clear" and that they did not see any other choice than to step down. Gizhas mentioned that the bureaucratic process to remove Yukos' representative office in Lithuania had already begun, and when asked about the future of Mazeikiu he answered, "you no longer need to address this question to me.

"English was happy at the recent turn of events. "What's next? Let's get to work. We will do all we can so that the fallout from the recent accident will bring less damage to the company," English said.In the months since the $2.3 billion deal was signed with PKN Orlen, the refinery was cut off from Russian crude oil deliveries 's ostensibly due to a pipeline leak in Belarus 's and suffered a fire that caused some 48 million euros in damages.

Still, the government and PKN Orlen have repeatedly supported English. Prime Minister Gediminas Kirkilas said that the attempt to oust the general director is evidence of the wish of some on the board to preserve their influence.Last week, the sale of Mazeikiu Nafta to Poland's PKN Orlen received the approval of the EU competition authorities which allowed the planned sale of the refinery to PKN Orlen to go through.

PKN Orlen agreed to pay $1.5 billion for a 53.7 percent stake in Mazeikiu Nafta to Yukos, and another 850 million dollars for a 30.7 percent stake owned by the Lithuanian government. The planned sale has been wrought with controversy and problems such as a pipeline accident in Russia causing Russian crude from flowing to the refinery, and a fire that damaged the vacuum distillation unit at the plant in October.