Lithuanian Government to Consider Agreements between Williams International and YUKOS

Drafted agreements for international cooperation between the American Williams International company, the operator of the Lithuanian Mazeikiu Nafta oil refinery, and the Russian YUKOS petroleum concern must be submitted for discussion to the government of Lithuania no later than the end of the next week. This is according to what Pyatras Chesna, the Lithuanian Minister of Economy, told local reporters yesterday. The minister said nearly all differences between the parties had been resolved, just technical issues remaining to be discussed. Neriyus Eidukyavichus, the head of the workgroup formed by the government, said there would be some time before the agreements had been looked at in detail, so they would not be signed in time for Mazeikiu Nafta's stockholders' meeting scheduled for April 30. The stockholders are supposed to make a decision as to increasing the statutory capital of the company, the additional issue of shares to go to YUKOS.

The two companies have been negotiating since June last year. The expected outcome is the sale to YUKOS of 26.85% of Mazeikiu Nafta for $75 million. YUKOS is also supposed to loan another $75 million to the refinery for its modernisation, then assure the annual supplies of 4.8 million tonnes of crude to the refinery over the following 10 years while exporting 4 more million tonnes of it through the Butinga oil terminal, Lithuania. In December 2001, the negotiations stalled to be renewed in January. The process stumbled over the issue of fines for delaying the guaranteed crude supplies, which YUKOS did not want in the agreement.