Oil deal to be inked soon

  • 1999-05-20
  • By Paul Beckman
VILNIUS - For nearly a year, the Lithuanian government and the American energy company Williams International have been playing their own version of "Let's Make a Deal" for a one-third stake in Lithuania's oil sector. But just as observers were being lulled to sleep by the long process, the two sides suddenly seem on the brink of coming to a final agreement.

For $150 million, Williams plans to purchase 33 percent of Lithuania's Mazeikiu Nafta energy corporation, which consists of the Mazeikiu Nafta refinery, Birzu Naftotiekis pipeline, and the Butinge import-export terminal. Another $150 million will come in the form of reinvestments.

More recently, the Lithuanian government also approved an option for Williams to buy another 33 percent chunk over a seven year period following the completion of the investment deal.

On May 11, Economic Minister Vincas Babilius presented this added option to the Lithuanian Parliament, whose approval is required. According to the government's press office, this will be considered and discussed towards the end of May.

A couple of days later, the Williams side showed some activity as well. Williams International's board of directors approved the company's investment project May 13. While this is not quite the last step Williams needs to take in closing the deal, Williams Lithuania General Director Randy Majors indicated that it was pretty close.

"This decision sets the stage for final approval from the board of directors of the Williams Companies," Majors stated. "Recognizing that the [Lithuanian Parliament] must approve our transaction, Williams is still optimistic that the investment deal can be completed by the end of June."

Although the Parliament seems likely to approve the deal, Williams is not without its critics. Social Democrat and Labor Party factions have been complaining for over a year about the process in which Williams was selected. Babilius has also taken plenty of heat for the $150 million selling price.

Center Union head Romualdas Ozolas lashed out recently by stating at a press conference that information about Williams has been insufficient.

"The information available to us now and which was presented to Seimas (the parliament) by Economic Minister Vincas Babilius might be called pure demagogy or open lies," ELTA quoted Ozolas as saying.

Darius Silas, spokesman for Williams' Lithuanian office, simply said Williams does not involve itself in the country's political arena.

"We realize there are different opinions and we respect a person's right to express them," Silas put simply.