There's a Lineup for Mazeikiu Nafta
// But Russia's Ministry of Justice is determined not to let YUKOS sell it
International cooperation
Russia's Ministry of Justice yesterday sent requests to Lithuania and the Netherlands to identify assets belonging to YUKOS> affiliates on their territories and to prohibit the registration of transactions with shares of the Lithuanian Mazeikiu Nafta (MN) belonging to YUKOS. According to Kommersant's information, the Lithuanian authorities have not received the letter, but were prepared to react to it. Prime Minister Algirdas Brazauskas said that the ministry's letter could have a negative influence on negotiations to sell these shares. Meanwhile, the number of contenders for the purchase of YUKOS's stake in MN is growing with each passing day. James Malva, CEO of the American oil company ConocoPhilips, met yesterday with Lithuanian President Valdas Adamkus and Prime Minister Brazauskas.
Mazeikiu Nafta includes the Mazeikiu Oil Refinery with a capacity of 12 million metric tons of oil per year, the Butinge terminal with a throughput capacity of 8 million metric tons per year, and the Birzai oil pipeline. A YUKOS subsidiary, the Dutch company Yukos Finance B.V., owns 53.7 percent of MN's shares, and the Lithuanian government owns 40.66 percent.
YUKOS managers announced their intention to sell the company's shareholdings in MN in the spring. According to sources at YUKOS, the company is willing to sell the shares for $800-900 million. TNK-BP, LUKOIL, the Swiss trader Vitol, the Kazakh state company Kazmunaigaz, Gazprom, and Gazprombank [see yesterday's edition of Kommersant] have all expressed interest in the assets. The list of potential buyers has now expanded to include ConocoPhilips.
However, ConocoPhilips is hoping to join forces with a Russian company. CEO James Malva said yesterday that he considered a partnership with LUKOIL (the American company owns more than 10 percent of LUKOIL's shares) as a real possibility. LUKOIL insists that it's premature to speak of this. “We're prepared to study any option for buying Mazeikiu Nafta, if its sale is announced, “Dmitry Dolgov, LUKOIL's press secretary, told Kommersant.
According to Malva, ConocoPhilips is not only interested in the MN shares belonging to YUKOS, but also in 10-20 percent of the shares owned by the Lithuanian government. Prime Minister Brazauskas spoke of the possibility of selling them a day earlier during talks with Gazprombank President Andrey Akimov.
It is notable that all the contenders for the MN shares belonging to YUKOS are holding talks with the Lithuanian government. Brazauskas indicated this yesterday, saying that the final choice of a buyer was for YUKOS to decide.
But YUKOS should hurry and make the choice, because if the governments of Lithuania and the Netherlands meet the wishes of the Ministry of Justice, its package of MN shares could be seized. But there's still time. Gintaras Svedas, Lithuania's vice-minister of justice, said his ministry had still not received the request from the Russian Ministry of Justice. In his words, such letters usually take at least two weeks to reach the recipient. “Right now, it's difficult to make any comment, because both the grounds for this request and its contents are unclear. If everything actually conforms to international statutes, then of course we will have to fulfill this request,” he said.
Thus, the Lithuanian authorities were taking a wait-and-see attitude, but Ministry of Justice's letter has fallen into the hands of the Lithuanian opposition, whose leader, Andrus Kubilus, urged the government the other day not to allow the sale of MN's shares to Gazprom or LUKOIL. “Lithuania is obligated to protect itself from the Kremlin's attempts to get control of all of Lithuania's energy industry, including Mazeikiu Nafta,” he said.
Kommersant will be following the development of events.
Vladimir Vodo, Vilnius; Anna Skorniakova
All the Article in Russian as of June 30, 2005
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