Lithuania launches new oil concern

  • 1998-12-10
VILNIUS (BNS) - Lithuania's new Mazeikiu Nafta oil concern was formally launched after an agreement between three parties was signed Dec.1.

The concern is formed by the Mazeikiu Nafta oil refinery, Naftotiekis transportation company and the Butinges Nafta oil terminal. After the agreement was signed the latter two companies became Mazeikiu Nafta's subsidiaries.

Jonas Kazlauskas, director of the Economics Ministry's energy development department, hailed the agreement as "an important event for Lithuania and its energy sector."

"It marks the establishment of a large and powerful company with the third largest share capital after the Ignalina nuclear power station and Lietuvos Energija," he said.

Mazeikiai Oil's share capital, which now amounts to almost 700 million litas ($175 million), will surge to 1.03 billion litas after U.S. Williams International will acquire a new issue of shares.

Audit company Arthur Andersen has been working out a new structure for the concern which will allow a Western system. Mazeikiu Nafta will employ almost 3,800 people. Gediminas Kiesus, the company's director general, said he expected the consortium to end this year with a profit, despite Butinges Nafta's unprofitable operations and a recent slump in global oil prices.

The Birzai-based oil transportation company's anticipated profits of over 30 million litas are expected to cover Butinge's 3 to 4 million litas losses.

The Mazeikiai-based oil refinery had around 6 million litas in profits after a half-year loss of 20.7 million litas.

Mazeikiu Nafta, which currently exports two thirds of its production to the west, plans to refine 6.7 million tons of oil this year, and 24 million tons of oil and diesel fuel are expected to be pumped through Birzai.