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. Last Updated: 07/27/2016

Yukos Wins Reprieve in Lithuania

MTYukos founders Mikhail Khodorkovsky and Platon Lebedev during their trial Tuesday.
VILNIUS, Lithuania -- Yukos should continue to run Mazeikiu Nafta, Lithuania's refinery and crude-oil terminal, Lithuanian Prime Minister Algirdas Brazauskas said Tuesday after top Yukos officials pledged to ensure supplies.

"Yukos is not a totally bankrupt company," Brazauskas told reporters after a meeting in Vilnius with Yukos CEO Steven Theede and CFO Bruce Misamore. "It's still a serious company able to manage and supply Mazeikiu, which they said they don't want to lose."

The refinery in western Lithuania hasn't worked since Feb. 5 for lack of crude caused by what Brazauskas called "a technical glitch" in the transfer of payments for new supplies. Yukos, Russia's largest oil exporter in 2004, holds 54 percent of Mazeikiu and is trying to protect its remaining assets after Russia sold the company's biggest production unit in December to help collect about $28 billion in back taxes.

Lithuania, which owns 41 percent of Mazeikiu, last month asked Yukos to give up its management rights and let the government assume the company's option to buy 9.7 percent of Mazeikiu. The government said the proposal was based on concern Yukos could no longer ensure supplies of crude, forfeiting its status as a "strategic investor," and related options.

"They aren't firmly decided about the option yet," Brazauskas said. "My view is the government would only need those shares if and when it sees that Yukos is no longer able to run and supply Mazeikiu."

Economy Minister Viktor Uspaskich, who also met with Theede and Misamore, said Yukos had agreed to hold negotiations about Lithuania's proposals, which could last about three months.

Delaying the decision allows Mazeikiu to benefit from Yukos' resources until the company's fate becomes clearer, which mostly depends on how the Russian government implements its remaining claims for back taxes, Uspaskich said.

"Yukos remains our strategic partner and we will work with them just as much as that is possible," the minister told reporters. "Still, I doubt even now that Yukos can fully guarantee oil supplies." The current supply disruption shows Yukos is losing control over its business in Russia, Uspaskich said. "It's part of the conflict between Russia and Yukos. ... I'm not inclined to think Russia wants" to use the supply cut "to pressure Lithuania."