Nazarbayev's visit to Lithuania brings no oil

VILNIUS - Although oil supplies from Kaza-khstan were continuously discussed during the visit of Kazakhstan's President Nursultan Nazarbayev to Lithuania last week, no progress was reached on the issue because of Russian transit tariffs.

Nazarbayev visited the Butinge oil terminal on Lithuania's northern cost near the Latvian border. Inside the terminal's facilities Nazarbayev and Lithuanian President Valdas Adamkus were briefed in detail on the terminal's operation, capacity and possibilities.

Asked by reporters whether Kazakhstan oil could flow to Lithuania, Nazarbayev said, "No one can say, the situation is being scouted out."

He added that a lot depends on negotiations with Russia.

The American-run Mazeikiu Nafta oil refinery operation in Lithuania is interested in buying oil from Kazakhstan, but he said the Russian export tariffs are a major obstacle.

In July 2000, the Karazhbas-munai company and Mazeikiu Nafta signed an agreement under which 70,000 tons of oil were to be supplied to Lithuania monthly as of September 2000. The supplies were to be later increased to 100,000 - 120,000 tons per month and to 3 million tons per year in the future. However, Kazakhstani oil has not reached Lithuania until now. At their official meeting in Vilnius, the presidents called on the governments of both countries to create a favorable climate for expanding ties between oil companies and successfully implementing the import-export agreements those companies arrive at.

Lithuanian Prime Minister Rolandas Paksas and the Kazakhstan's delegation agreed on encouraging Russia to lower the transit tariffs on Kazakhstan oil transported through its territory.

Paksas and Kazakhstani Energy and Mineral Resources Minister Vladimir Shkolnik, deputy to the Kazakhstan's prime minister, discussed in the meeting the possibilities of the country's oil supplies to Lithuania. Kazakhstan is expecting to nearly double its oil production in the coming five years.

Mazeikiu Nafta has so far failed to reach agreement on long-term oil supplies with the Russian suppliers. At present Kazakhstan produces 35 million tons of oil a year and expects to produce as much as 60 million tons in four years.

Paksas noted that Lithuanians could assist Kazakhstan in road and house building.

Lithuanian Transport Minister Dailis Barakauskas, his Kaza-khstani counterpart Karim Massimov and the presidents approved a plan for Barakauskas to go to Kazakhstan in April with a delegation from the Lithuanian road construction companies Kauno Keliai, Alkesta and Siauliu Plentas. They are planning a joint company for road-building in Kazakhstan. The construction projects they discussed for Kazakhstan were worth an estimated $29 million.

Lithuanian Interior Minister Vytautas Markevicius and Kazakhstan's tax police chief Sergei Kuzmenko signed an inter-governmental treaty on cooperation in fighting tax violations.

Inter-ministerial agreements on cooperation in environmental protection and taxation were signed, as was a protocol for cooperation between Lithuania's Baltic Sea port of Klaipeda and Kazakhstan's Caspian Sea port of Aktau.