RIGA - Paul Nelson English, CEO of the Mazeikiu Nafta refinery, will resign his position, PKN Orlen officials have said. Piotr Kownacki, chief of PKN Orlen, the largest retail fuel distributor in Eastern Europe which acquired the Lithuanian refinery last year, told a news conference on June 4 that English had informed him that he would resign. "I asked him to stay until the end of June. From July 1, Mazeikiu will have a new head," Kownacki said. "Of course the decision is up to the board of Mazeikiu, but if I had to point to a strong candidate, then that would be Marek Mroczkowski, a current board member of PKN Orlen," he said.
Nelson has come under fire in recent weeks after prosecutors blamed him for negligent management that lead to a major fire at the refinery last October. Prosecutors claim that Nelson and his deputy, Barton Lee Luck, failed to replace some pipes in a timely manner, which eventually triggered an explosion.
The fire caused some 40 million euros in damages, and the refinery has yet to restore throughput to pre-fire levels. The plant now processes around 15,000 tons of crude oil per day, compared with its prior working level of over 25,000 tons.
Financially, the company's bottom line took a big hit in 2006, though it managed to end the year in the black.
Prosecutors barred both men from leaving the Baltic state.
In a separate development, Kownacki told the ISB news agency that PKN Orlen would be interested in exploring Latvia's territorial water for crude oil.
Kownacki clarified that it was unsure whether any opportunities to explore for oil in the Baltic Sea would arise and whether the crude, if it exists, is a matter of dispute between Latvia and Lithuania. He also said that the present time is not favorable for obtaining new oil fields due to rising prices and a shortage of delivery options.
The Latvian government is keen to develop oil extraction in its territory, even over protests from the Environment Ministry. Experts say there could be oil in the Gudenieki district in western Latvia.
Some small oil deposits have also been found in western Lithuania. Last year the country's oil wells produced 181,800 tons of crude, down 16 percent year-on-year.
There are four companies extracting crude in Lithuania.
Latvian Environment Minister Raimonds Vejonis has in the past criticized the idea of exploring for oil as frivolous. In his estimation, it would require too much money and the yields would be minuscule.
He said he was also against exploring in the Baltic Sea due to environmental concerns.
Several years ago, Russia's Lukoil opened a new series of oil fields in the Baltic Sea off the coast of the Kaliningrad region.
