Lithuanian president rejects talk of key refinery's sale

25th August 2010, Comments 0 comments

Lithuanian President Dalia Grybauskaite said Wednesday that her Polish counterpart had reassured her that Poland's energy group PKN Orlen was not set to sell off Lithuania's only oil refinery.

"The company has hired consultants to advise how to optimise its work. For now there is no talk of a sale. This is what the president confirmed," Grybauskaite told reporters after meeting with Poland's leader Bronislaw Komorowski, who was on holiday in Lithuania.

There has been repeated speculation for more than a year that PKN Orlen, in which the Polish state holds a share of almost 28 percent, could sell off its Lithuanian refinery arm Orlen Lietuva, potentially to Russian investors.

Grybauskaite dismissed the market talk.

"There is all kinds of speculation. It probably comes from concerned parties, because somebody may want to buy at a lower price," she said, without elaborating.

She noted that the current market price for Orlen Lietuva is half that in 2006 when PKN Orlen bought it.

"I would not think that somebody thinking about business would sell for 50 percent of what he paid," she added.

The sale-talk heated up after PKN Orlen recently appointed Nomura Bank to advise it on the future of Orlen Lietuva.

The Lithuanian government has said such speculation is doing little to encourage it to settle sparring with PKN Orlen over logistics for the refinery based at Mazeikiai in northwest Lithuania.

PKN Orlen and Lithuanian authorities have been wrangling over a state-owned oil terminal near Klaipeda on the Baltic coast, which the refinery uses to export its output.

PKN Orlen has expressed interest in buying the terminal, but the government, dubbing it a strategic asset, has refused to sell.

Orlen Lietuva has to use the terminal because a pipeline to Russia remains switched off.

In July 2006, shortly after PKN Orlen bought the Lithuanian refiner, Russia's fuels transport giant Transneft turned off the tap on its Druzhba oil pipeline serving Lithuania, citing repairs.

© 2010 AFP

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