Higher sales, repairs help Mazeikiu recover

  • 2008-05-22
  • By TBT staff
VILNIUS - A more than two-fold jump in sales at Mazeikiu Nafta has helped the Baltics' only oil refinery to significantly reduce first quarter losses to 6.6 million litas (1.9 million euros) compared to a loss of 135 million litas in the same period last year.
The company reported on May 16 that first quarter sales reached 3.6 billion litas, up from 1.6 billion litas a year ago, largely thanks to restarting the vacuum distillation unit in January.

In October 2006 the unit was destroyed in a fire that cost Mazeikiu Nafta nearly 40 million euros in damages.
The company said that once the unit was restored the refinery was able to return to its pre-fire capacities.
In all, Mazeikiu Nafta, which is 90 percent owned by Poland's PKN Orlen, processed 2.1 million tons of crude over the three month period, a rise of 60 percent year-on-year. Wholesale sales rose 22 percent, the company said.

The company said in a statement that first-quarter financials were adversely impacted by a fall in refining margins for heating oil, which makes up a significant part of the refinery's output.
Mazeikiu Nafta produced and sold 448,000 tons of heating oil in the first quarter of 2008, or 17 percent of total sales.

In addition to the fire, in July 2006 Russian ceased pumping crude oil via pipeline to the Mazeikiai-based plant, citing an alleged pipeline accident in Belarus. Lithuanian officials were not allowed to inspect the site, leading many to conclude that Moscow simply decided to punish Vilnius for selling the refinery to Poland's PKN Orlen.
Lithuania's leadership appealed to Brussels for help and still bristles at the lack of progress on the issue. Recently diplomats refused to sign onto a EU-Russian partnership agreement to be signed by the two sides in June, though earlier this month officials agreed to approve the deal.

For the full year 2007, Mazeikiu Nafta posted earnings of $32 million on sales $3.4 billion dollars. It is the Baltics' largest enterprise.
The refinery processed 5.8 million tons of crude last year and hopes to increase that amount to 10 million in 2008. It is targeting revenues of $5.2 billion, or a 52 percent increase, this year as well.