WILLIAMS won't sell stake of Lithuania refinery to Tyumen

Saturday, July 14th 2001, 12:00 am
By: News On 6

(TULSA) - Williams International says it won't sell a stake of Lithuania's oil refinery to Russia's fourth-largest oil producer.

Williams International, a unit of Tulsa-based Williams Cos. Inc., isn't interested in selling part of Mazeikiu Nafta to Tyumen Oil Co.

Williams agreed in June to sell a 26.85 percent stake in the refinery to Yukos Oil Co., Russia's second-largest oil producer. The agreement says Yukos would provide 4.8 million tons of crude oil per year for the next 10 years to Lithuania's 319,000-barrel per day refinery. Yukos would pay $75 million for a stake and would provide the plant with a $75 million credit line for improvements.

The refinery is managed by Williams.

Tyumen recently made an unsolicited offer of $82.5 million for the same stake, a Lithuanian newspaper has reported.

Randy Majors, managing director of Williams International, said the Yukos agreement is a better deal for Mazeikiu Nafta and that Tyumen is an unreliable business partner.

Tyumen hasn't met its obligations, including an agreement to supply 100,000 tons of crude oil in May, Majors said. Tyumen was 47,000 tons short on the deal.

``Ever since we announced this deal with Yukos, they have been very interested in trying to disrupt it,'' Majors said.

Officials said there has not been a formal proposal.

The Lithuanian newspaper, Lietuvos Rytas, said Russian President Vladimir Putin is backing Tyumen. His support was contained in a letter to Lithuania's new prime minister, Algirdas Brazauskas.

But Majors says the letter was written by a ``low level'' official.

``There is no government support as of yet,'' he said.

Williams bought 33 percent of Mazeikiu Nafta in 1999 for $150 million. Lithuanian citizens and political leaders opposed the deal, saying it would create a financial crisis for the country.