On top of all that, the local press has given front-page attention to Mazeikiu Nafta's international arbitration proceedings with a U.S. firm that helped construct Butinge and to new findings about last year's kidnapping and apparent murder of the refinery's former general director, Gediminas Kiesus.
The new problems have come at a bad time for Williams, which has been strongly criticized by the government this fall for huge ongoing losses at the refinery.
The Lithuanian prosecutor general has also launched an investigation of possible negligence at Butinge, and Transport Vice Minister Arijus Ramonas was appointed to head a working group that must report to Prime Minister Algirdas Brazauskas by Dec. 4 on the cause and scale of the accident.
Meanwhile, on the evening of Nov. 24 an explosion took place in a furnace and gas-exhaust stack at the Mazeikiu Nafta refinery. No one was injured by the blast, which forced the company to reduce processing operations by 15 percent and launch yet another investigation.
"An initial investigation into the cause of the explosion points to an undetermined amount of gasoline entering the fuel system used to operate the furnace, which is usually fired by a mix of gases, such as butane and propane," Mazeikiu Nafta General Director Jim Scheel said.
The damaged furnace and stack supported operations in three other units at the refinery – an oligomerization unit, a reformate splitter and a dewaxing unit. Bypass systems were being constructed to bring the affected units back on line as quickly and safely as possible. The overall crude oil processing cycle at Mazeikiu Nafta has not been interrupted.
The oil spill and explosion came amid a new spat between Williams and the government over old issues linked to Mazeikiu Nafta's privatization in 1999, when the U.S. investor bought 33 percent of the shares and management control of the oil complex.
Citing damages of 92 million litas ($23 million) caused by the government's failure to meet some of its obligations under the privatization deal, Williams announced on Nov. 22 that it was halting monthly interest payments on government loans to Mazeikiu Nafta. The company insisted it was doing so legally and within the terms of its contract with the government.
However, the government reacted with astonished anger. Brazauskas was cited by BNS as telling parliamentarians on Nov. 22 that he was considering whether to "go into open conflict" with Williams over the issue. He did not rule out taking the U.S. company to court.
"Unfortunately, to date, we have been unsuccessful in reaching a constructive resolution with the government on a number of issues," said Randy Majors, Williams-Lithuania general director and Mazeikiu Nafta board member. "This is hindering efforts to obtain financing for modernization, slowing completion of the investment of the Russian oil company Yukos, and contributing to Mazeikiu Nafta's losses," he added.
Majors said the government had been warned that the interest payments could be used to offset monies owed to and expenses incurred by the oil complex.
Mazeikiu Nafta is Lithuania's biggest company. It includes the Baltic states' only oil refinery, plus the Butinge import/export oil terminal on the Baltic Sea and a pipeline system. The company has reported an unaudited loss of just over $40 million for the first nine months of 2001.