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. Last Updated: 07/27/2016

Yukos to Rebid for Slovak Pipeline

BRATISLAVA, Slovakia -- Russia's second-largest oil producer Yukos and Slovakian refiner Slovnaft said Tuesday they would meet a Slovak government request for improved bids in the tender selling its oil pipeline operator.

Slovakia has offered to sell 49 percent and management rights in Transpetrol in a deal valued by analysts at some $50 million. The Cabinet earlier Tuesday said it would ask the two bidders for the stake to improve the offers by Thursday.

Yukos and Slovnaft were the only firms to bid last week.

Although small in terms of revenues at 1.15 billion Slovak crowns ($23.73 million) in the first half of 2001, Transpetrol is seen as a potentially important part in the transit system for crude oil from the Caspian Sea region to Western Europe.

"We have decided to reassess our bid and that we will continue in the tender," Slovnaft CEO Slavomir Hatina told a news conference Tuesday.

Hatina said Slovnaft's entry into Transpetrol would allow Slovakia to diversify its oil supplies and that the refiner would aim to increase the pipeline's transit volumes.

Yukos officials said the producing and processing oil giant would also place an updated bid for Transpetrol, adding it would guarantee that Transpetrol's clients would be able to choose their own source of crude oil.

"On Thursday, we will come out with our new offer," vice president for sales and marketing Mikhail Brudno said in a conference call with Slovak journalists.

With earnings before interest, taxes, depreciation and amortization (EBITDA) of around $149 million in January-June, Slovnaft is much smaller than Yukos, whose first half EBITDA totaled $2.2 billion.

The government, which will keep the remaining 51 percent of Transpetrol, is aiming to choose the new investor by the end of 2001.

Originally, six companies expressed an interest in acquiring Transpetrol, including Czech Ceska Rafinerska, U.S. oil group ChevronTexaco and two other Russian firms, Rosneft and Surgutneftegaz.

The Cabinet has said the sale price could be negatively affected by a controversial court ruling freezing all Transpetrol shares due to a pending lawsuit filed by a private firm against the state.

Brudno would not disclose whether Yukos would try to secure an option to acquire a majority stake in Transpetrol if the government lifted the ban on the sale of the remaining shares, but he said "our offer reflects this issue."

Transpetrol runs pipelines with an annual transport capacity of some 21 million tons of crude. It moved 9.3 million tons in 2000, of which Slovnaft processed 5.3 million.

Yukos said it would like to raise the transited volumes and possibly increase the pipeline's transport capacity.