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Roundup: Lithuanian gov't reassures support to strategic oil refinery amid losses

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(GlobalPost/GlobalPost)

VILNIUS, July 23 (Xinhua) -- Lithuanian Prime Minister Algirdas Butkevicius reassured the government's support for struggling oil refining company Orlen Lietuva after the strategic company announced second quarter net loss of 17 million U.S. dollar on Wednesday.

Butkevicius said that the Lithuanian government cannot influence commercial processes in Orlen Lietuva directly, but reassured the government's support for continuation of the oil refinery's activity.

"I personally met the management of the company in May 2014 and said that the government is ready to cooperate in solving their issues. We discussed possible solutions," said the prime minister in a statement.

"But still there's a lack of initiative from Orlen Lietuva themselves," added Butkevicius.

The government published the statement in response to rumors on possible shut down of the strategic oil refinery in Mazeikiai controlled by Polish oil company PKN Orlen.

Rumors on possible suspension of Orlen Lietuva operations spread on the eve of announcement of PKN Orlen and its subsidiary in Lithuania second quarter results.

Jacek Krawiec, chief executive officer of PKN Orlen, reassured on Wednesday that the Polish oil company will firstly seek to improve operational efficiency of Orlen Lietuva.

"We are not giving up on Mazeikiai," Krawiec was quoted as saying at a news conference in Warsaw by BNS news agency.

As BNS reports, Krawiec didin't rule out other options and admitted that possibility to find a buyer for the struggling refinery in Lithuania is largely theoretical.

The refinery's net loss excluding impairment losses for the second quarter was 17 million U.S. dollars, compared to net loss of 42 million dollars in the first quarter.

Revenues were 1.701 billion dollars, compared to revenue of 1.285 billion dollars in the period from January to March. The impairment losses amounted to 769 million dollars.

Financial challenges of Orlen Lietuva are associated with ongoing shale oil and gas revolution in the United States and its transition into net export of oil products. It lowers demand for European refining companies' production and squeezes their profit margins.

http://www.globalpost.com/dispatch/news/xinhua-news-agency/140723/roundup-lithuanian-govt-reassures-support-strategic-oil-refi