Mazeikiu Nafta sees profits again

The chief executive of Mazeikiu Nafta, the Lithuanian oil firm managed by Russian oil giant Yukos, has confirmed that it has turned a profit in the first two months of 2003, but it is still projecting a loss for the year.

Speaking at a news conference on March 6, Paul Nelson English, CEO of Mazeikiu Nafta, also unveiled plans to set up a trade house to increase the company's market share in Estonia, Latvia and Poland.

Mazeikiu Nafta also said that the crude oil refinery in Mazeikiai, in northwestern Lithuania, would shut down for a month for scheduled maintenance in late March, adding that the company has sufficient supplies in reserve to meet market needs. The plant is expected to operate without interruption for at least three years following the maintenance work.

"January was profitable, and February was even more profitable, but we do not release our results on a monthly basis," English said. "We will not announce our results until the first quarter ends."

Mazeikiu Nafta's chief executive neither confirmed nor denied media reports that Mazeikiu Nafta posted a profit of 3.8 million litas (1.1 million euros) for January, returning to profit after several years in the red.

Last year, Mazeikiu Nafta projected a loss of 85 million litas for 2003. The group reported an unaudited loss of 123 million litas in 2002.

English said Mazeikiu Nafta was planning to invest $61 million (55.51 million euros) in the refinery's modernization in 2003. The group does not intend to borrow money for the modernization program this year.

Total investments in the modernization program reached $58 million from 1999 to 2002.

Yukos owns 53.7 percent of Mazeikiu Nafta. The Lithuanian government currently holds 40.66 percent of shares in the oil refining and transportation complex, but it plans to sell a part of its holding to the European Bank for Reconstruction and Development by year's end.