By the OGJ Online Staff
HOUSTON, June 15 -- The international unit of Williams, Tulsa, and OAO Yukos, Moscow, have signed a cooperative agreement to work toward a transaction involving Yukos' purchase of equity in Lithuanian oil company Mazeikiu Nafta for $75 million.
Williams and Yukos also want to arrange a long-term crude supply agreement for the 263,420 b/d Mazeikiu Nafta refinery. The companies want to complete a deal by mid-September.
If a proposed 10-year crude supply agreement is finalized, Yukos would supply 35 million bbl of crude/year to Mazeikiu Nafta's refinery. Yukos will also provide a $75 million credit line to Mazeikiu Nafta, helping finance the refinery's modernization.
The deal remains subject to approval from the Lithuanian government and Mazeikiu Nafta shareholders.
Upon approval by the Lithuanian government and completion of the transaction, Williams and Yukos will become equal financial partners, each holding a 26.85% share of Mazeikiu Nafta.
Previously, Williams purchased 33% of Mazeikiu Nafta but its stake will be diluted by the proposed deal. After the proposed transaction, Williams will maintain its management control of Mazeikiu Nafta as outlined in an October 1999 agreement.
The deal remains subject to approval from the Lithuanian government and Mazeikiu Nafta shareholders.
