Williams, Lithuania move closer to a deal

  • 1998-08-06
  • Parker Ruis
VILNIUS - After an intense day of negotiations that went beyond usual working hours, John Bumgarner, president of the American oil company Williams International, and Lithuanian government representatives made headway July 29 towards nailing down an agreement. Williams, which is seeking to purchase a 33 percent stake in three Lithuanian oil companies, signed a protocol of intentions on investments with the Lithuanian government. The two sides also seem to have knocked away their disagreement concerning the price.

Although Bumgarner was in Vilnius towards the middle of July, he left without an agreement with the Lithuanian government on the price for one third of Birzu Naftotiekis (Birzai Pipeline), Mazeiku Nafta (Mazeikiai Oil) and Butinges Nafta (Butinge Oil). Williams' experts estimated the value to be worth $300 million, half of which would come in the form of reinvestments. French Banque Paribas, the Lithuanian government's adviser, put their value at $90 million higher. After the July 29 negotiations, however, compromise appears to have replaced disagreement.

According to Williams Lietuva (Williams' Lithuanian office) Spokesman Darius Silas, the Lithuanians have agreed to accept Williams' suggested offer of $300 million, but will not include 14 Mazeikiai Oil petrol stations, a hotel on the oil complex, and a Birzai woodworking enterprise in the deal as previously planned.

"I believe both sides are satisfied," said Silas. "We hoped for an agreement that would be beneficial for both sides. There was a considerable program in bringing both positions closer to each other. Now we're looking forward to the next stage."

The next stage will include coming to a final agreement and getting it approved by both the Lithuanian government and Williams' board of directors. Lithuanian officials expect the deal to be fully completed in October.

Some members of the Lithuanian parliament have wasted no time voicing their dissatisfaction with the developments in negotiations with Williams. While Social Democrat leader, Aloyzas Sakalas told TBT in an earlier interview that he opposed the privatization of bigger objects and that the selection process, in which Williams was chosen as the only company with which the government would negotiate, was flawed.

MP Rimantas Smetona more recently lashed out in a more serious manner. In a letter to Prosecutor General Kazys Pednycia, Smetona accused Economics Minister Vincas Babilius, Prime Minister Gediminas Vagnorius and others tied to the privatization program of damaging national interests by losing nearly 3 billion litas ($750 million) in privatization deals.

According to Kestutis Betingis, deputy prosecutor general, Smetona wrote that criminal charges should be brought against them.

"So far, the general prosecutor's office has not decided upon any actions regarding the accusations," said Betingis. "We plan to meet Mr. Smetona soon to clarify his point of view."

Although the Prosecutor General's office is going through proper procedures, analysts have expressed that Smetona's actions will not lead to any serious complications for those he accuses.