Russia's Tyumen to press ahead with oil supplies

  • 2001-08-02
  • BNS
VILNIUS - It seems clear that the Lithuanian government's favorable decision on the implementation of the agreement between the U.S. energy company Williams International, operator of the oil company Mazeikiu Nafta, and Russia's Yukos will not affect the plans of the Russian oil concern Tyumen Oil to supply crude to Lithuania.

According to the Russian business newspaper Vedomosti, Tyumen Oil intends to supply some 200,000 tons of oil a month. Tyumen made the a decision even though its hopes of acquiring a 26.85 percent stake in Mazeikiu Nafta are dwindling fast.

The Lithuanian government said on July 27 that in principle it approved of amendments to the law on the privatization of Mazeikiu Nafta that are needed to facilitate the deal between Williams and Yukos. The Lithuanian Parliament endorsed the amendments on July 30 and decided to consider them as a matter of urgency.

In the interview to Vedomosti, Tyumen Oil's vice-president Vadim Sapronov said the decision of the Lithuanian government has not disappointed him, and that it fully intends to proceed with oil supplies to the Mazeikiai refinery.

Under the agreement between Williams and Yukos, the Russian oil producer would acquire a 26.85 percent stake in Mazeikiu Nafta through new share issues for 300 million litas ($75 million) and provide a loan of the same amount to finance the oil refinery's modernization.

Under a 10-year crude supply deal, Yukos would provide Mazeikiu Nafta with 4.8 million tons of crude per year and also export 4 million tons through Mazeikiu Nafta's Butinge terminal annually.

Tyumen Oil had previously announced its wish to acquire the stake in Mazeikiu Nafta for a higher price than the one offered by Yukos.

Mazeikiu Nafta reported an unaudited loss of 71.647 million litas for the first half of this year, according to the generally accepted U.S. accounting principles GAAP.

Mazeikiu Nafta's losses grew nearly fourfold from January to June compared with the same period last year, when the company's losses came to 18.33 million litas.

The company's turnover grew by 53.2 percent to 2.93 billion litas in the six-month period year-on-year, Tadas Augustauskas, head of the communication service at Mazeikiu Nafta, said.

In the first half of 2000, the company's turnover amounted to 1.91 billion litas.

Williams International currently holds a 33 percent stake in Mazeikiu Nafta, and the state controls 59.3 percent of Mazeikiu Nafta shares. Under the agreement between Williams and Yukos, which was signed in June, the latter would acquire 26.85 percent of the company's shares. Following Yukos' acquisition of a stake, the state would control 40 percent, and Williams, like Yukos, would hold 26.85 percent of shares.