VILNIUS - The Mazeikiu Nafta oil refinery announced on Aug. 13 that first-half losses amounted to 50.6 million litas (14.6 million euros), a staggering decline compared to earnings of 371.3 million litas for the same period last year.
The refinery's revenues for the first half of 2007 fell 40.9 percent year-on-year to 4 billion litas.
"We continue to feel the effects of last year's fire," Mazeikiu Nafta CEO Marek Mroczkowski, who was recently appointed by the refinery's new owner, PKN Orlen, said in a statement.
However, intensive work on restoring the refinery's pre-fire capacity and the start of a modernization program are bases for keeping an optimistic outlook, he added.
In the second quarter revenues surged 55.4 percent compared with the first quarter to 2.4 billion litas.
Another upbeat trend: throughput increased to 1.8 billion tons in the second quarter, up 40.1 percent over the first quarter.
Mazeikiu Nafta said it would publish its full financial statements for the first half of this year on Aug. 31.
Last December PKN Orlen bought a 53.7 percent stake in Mazeikiu Nafta from Yukos International, a subsidiary of Russia's defunct Yukos, and a 30.66 percent stake from the Lithuanian government for a total of $2.3 billion.
The Polish group has since increased its stake in the company, which includes an import-export terminal in Butinge, to nearly 90 percent.
However, the fire in October and a decision by Russia to cease crude delivery by pipeline to Mazeikiai have turned out to be a double-jeopardy for PKN Orlen, the largest fuel retailer in Central and Eastern Europe.
Mazeikiu Nafta, which is the Baltics' only oil refinery and Lithuania's largest corporation, will soon resume the refining of Venezuelan crude after a year hiatus, according to reports.
A tanker carrying 100,000 tons of Castilla heavy crude from Latin America has moored at Butinge, which began pumping the crude on Aug 8, Olegas Ukrainecas, Mazeikiu Nafta's deputy CEO, was quoted as saying.
Mazeikiu Nafta first received a batch of Venezuelan crude 's Mesa 30 blend 's last year after the termination of Russian crude supply by pipeline. The refining of Mesa 30 proved to be economically unprofitable, even though the crude was mixed with Russian Urals blend.
Experts believe that refining the Castilla blend will also turn out to be a loss-maker. In Europe, heavy crude, which is cheaper but more damaging to equipment, is normally refined by more advanced refineries.