TIGHTLIPPED: Mikhail Khodorkovski, president of Russia's oil company YUKOS, has refused to comment on the oil supply deal signed with Williams in mid-June, saying that everything will depend on the stance taken by the new Lithuanian government. "We would like the government to give its opinion first, and then we will provide our comments," Khodorkovski said after meeting Lithuania's Prime Minister Algirdas Brazauskas in Vilnius on July 8. The meeting with Brazauskas was the first item on the agenda of Khodorkovski's one-day visit in Lithuania. The conversation with the newly appointed Lithuanian prime minister addressed the agreement between YUKOS and Williams, which operates Lithuania's Mazeikiu Nafta oil concern. Asked if the meeting allowed him to hope for a successful conclusion of the deal, the YUKOS president said it would be successful if the Lithuanian government made a rational decision on the matter.
RISKY BUSINESS: Estonia is not going to begin insuring state-owned real estate on a mass scale, as experts determined cheaper to pay one-time compensation than to pay insurance premiums. Finance Ministry adviser Daniel Vaarik said the state is such a large organization of diversified risks that it can be regarded as a large insurance company. "This is quite rational and conscientious behavior," he said. He said the risk is economically more justifiable than insuring all real estate. The issue of insuring state property came up following the fire last month at Estonia's Embassy in Washington.
SHOCK VALUE: Trustees of Latvia's state-owned electricity utility Latvenergo voted July 9 to grant the company's board members bonuses totaling 46,726 lats ($72,330) for last year, far less than requested by the board. The trustees voted that board members that worked from Jan. 1 to March 31 last year will receive the equivalent of one month's pay each – a total of 9,033 lats. Board members elected in April will receive three month's salary each 37,693. Company President Karlis Mikelsons will receive a bonus of 14,270 lats, less than half the 35,500 lats he requested. Board members originally requested bonuses totaling 277,000 lats, a request that Minister of Economy Aigars Kalvitas denied after the amount was leaked to the press. Latvenergo posted profits of 20.14 million lats last year on a turnover of 166.09 million lats.
SOFT PUSH: Software producer Microsoft is planning to step up marketing in Estonia and has hired the public relations firm Hill & Knowlton Estonia. "Besides supporting Microsoft's local media relations, the main task will be organization of functions and consultancy of marketing campaigns of Microsoft's new products in the Baltic countries," Microsoft's Baltic office reported. So far, Microsoft organized its marketing and public relations through its regional office in Riga.
TOBACCO BAN: The Lithuanian Parliament rejected in second reading on July 10 legal amendments introduced by the former government that would have canceled restrictions on tobacco advertising until Jan. 1, 2004. Instead it backed the motion by a Social Democratic MP to leave the ban in place. The Parliament voted 39 to 14 with five abstentions to approve the proposal put up by Sigita Burbiene. The amendment was supported by the Social Democratic coalition and the New Union, while most members of the Liberal faction voted against it. The amendments have yet to be put to a final vote. In late May, the Parliament rejected in a second reading the amendment aimed at temporarily removing the existing ban on tobacco advertising, and sent the draft back to the economy committee for further revision. The committee revised the draft amendment and, among other things, proposed to retain the ban on tobacco advertising on television. The changes that were rejected July 10 called for allowing tobacco advertising only on the inside pages of press publications and on radio programs broadcast between 10 p.m. and 7 a.m. It was proposed to continue to ban tobacco advertising in outdoor media (billboards, buses, etc.). Tobacco advertising has been banned in Lithuania since May 1, 2000.
ADVISER SOUGHT: The Lithuanian government should approve July 12 the criteria and tasks for an adviser on the privatization of the national air carrier Lietuvos Avialinijos, prepared by the State Property Fund. The SPF intends to announce a tender for a privatization adviser in the international press in the next two weeks The adviser will have to evaluate LAL's position in the international aviation market, analyze the company's economic and financial performance, singling out its strong and weak points, suggest sale strategies to the Lithuanian government and recommend whether the company should be reorganized before privatization. The adviser would also have to help organize a public tender as well as choose an investor. The government is planning to prepare the privatization program of LAL in the second half of this year and to complete it by early next year. LAL, which is 100 percent owned by the state, is going to be sold to a strategic investor. Last year, LAL had a 56 percent share of the passenger carriage market. The company carried 294,800 passengers, a 21 percent increase from the 244,000 passengers in 1999. In 2000, the company posted an audited loss of 24 million litas ($6 million) on a turnover of 196.72 million litas.
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