Once again, Lithuania gets a strong dose of Williams

VILNIUS - Lithuania got a dose of American-style public relations when Williams International President John Bumgarner visited Lithuania Feb. 3-7. Coinciding with United States Energy Secretary Bill Richardson's appearance at a Baltic energy investment seminar in the Vilnius region, Bumgarner's visit made front page headlines in local papers and, for the moment at least, got the media sector talking again about the American oil corporation that left a bitter taste in the mouths of many Lithuanians.

Bumgarner's slew of meetings and appearances served to offset criticism of a closed-door mentality that pervades the entire Williams deal. It included outreach to Lithuanian politicians, bureaucrats, academia and the clergy. "In the mass media there are a lot of opinions that this project is closed and is not open enough," said MP Rimantas Dagys, chairman of the Social Democracy 2000 party."All this skepticism about Williams International's investment is decreasing."

Bumgarner emphasized a need to modernize the Mazeikiu Nafta refinery and in helping the oil complex to become competitive in Western markets. He informed his audiences that the refinery's goal was to meet the demands of EU and then to sell the lion's share of its oil production to points west. In the future, Bumgarner said, only one-sixth of the oil produced by Mazeikiu Nafta would be sold in Lithuania and Latvia. He also promised that the modernization of Mazeikiu Nafta would be done by Lithuanians because he likes their work ethic.

Bumgarner's visit was not without controversy. When he arrived he had to fend off rumors that he was meeting with Lukoil to discuss selling Williams'‚ stake in Mazeikiu Nafta to the Russian firm. He responded that he was discussing issues of supply, not issues of shares with the Russian company.

He also criticized Eugenijus Maldeikis, the former economic minister who resigned his post after Parliament approved the sale of a 33 percent stake of Mazeikiu Nafta to the American firm. He accused the former minister of taking Lukoil's side in negotiations on the sale of the 33 percent stake in the oil complex.

Maldeikis denied the allegations, saying that he had only been representing Lithuanian interests during those negotiations. "My position is very plain - I just want the Mazeikiai refinery to keep on working. Meanwhile, they do not have crude," he said.

The main unresolved issue appears to be whether the oil company can get a long-term deal from Russian suppliers. This marks a departure from the oil company's original stance that it would be able to find crude from other sources and take advantage of the Butinge oil terminal's import capacity.

Jonas Cekuolis, spokesman for the Lithuanian Liberal Union, was impressed with the company's evasiveness when asked about supply. "He answered, American-style, that Williams is working hard to do all that is possible to get it. A very American answer, and saying nothing concretely. But that is natural because negotiations are still going on."

Dagys called himself "a moderate optimist" that Williams will prove profitable for Lithuania. "All things are going in a good direction," Dagys said. "At this moment the biggest problem is to reach a good contract with Russian companies. All other countries have difficulties in dealing with Russia because Russia is quite often on the unpredictable side."

During his trip Bumgarner played the part of both a money-seeker and a money donor. He donated 100,000 litas ($25,000) to the bishop of Telsiai for the construction of a new Catholic church in nearby Mazeikiai. Earlier in the week, he and Economic Minister Valentinas Milaknis approached the European Bank for Reconstruction and Development about investment in the oil complex.

Bumgarner also fueled speculation that Williams might be interested in getting involved in the future privatization of the Lithuanian gas and telecom industries.