March 19, 1998. - LUKOIL President Vagit Alekperov made working visits to Lithuania and Estonia on March 17-18 in the context of company plans of participating in the privatization of the oil industry, investments and the expansion of the petroleum product market in those countries.

In Vilnius Alekperov met Lithuanian Prime Minister Gediminas Vagnorius and negotiated matters related to the privatization of the Lithuanian fuel and energy industry.

They reached an understanding that the Russian NIKoil investment and banking group owning the second biggest stake in LUKOIL after the government would act as an investor in several Lithuanian denationalized facilities while LUKOIL would guarantee the annual delivery of 4 million tonnes of oil during a period of 10 years.

Alekperov also said that LUKOIL itself refused to participate in the privatization of the Mazeikiu oil refinery because there were no guarantees that the refinery's controlling shares could be purchased. "Such a company as LUKOIL cannot simply be an investor and passive shareholder, that is why we are not taking part in the project," he said.

Meanwhile, Alekperov stressed that the company is interested in expanding operations in the Baltic region. Today LUKOIL is the main supplier of the only refinery in the Baltic states in Mazeikiu and coordinates all deliveries. In 1997 it delivered 1.5 million tonnes of oil to the refinery. LUKOIL has 40 filling stations (22% of the market) and one oil store in Lithuania.

"The main motive of our operations in Lithuania is to secure our investments, namely the observation of the principle agreed with the Russian side of fair sharing of profits and risks related to the current economic situation in Lithuania, the state of the Lithuanian oil market and legislation guaranteeing property and profit rights," Alekperov said. During the tour he also met a number of other Lithuanian top officials. There was a reception at the Russian embassy in Vilnius for local business representatives.

In Tallinn Alekperov met Estonian Prime Minister Mart Siimann and other officials and discussed oil transit and possible investment projects. Estonia has seven LUKOIL filling stations (6% of the market) and one oil store. At a reception at the Russian embassy in Tallinn Alekperov met leading local entrepreneurs.

In Estonia the LUKOIL delegation also visited the Convent of the Assumption in Puhti which is one of the best known nunneries of the Russian Orthodox Church outside Russia. St. John of Kronshtadt who was recently canonized by the Russian Orthodox Church had been among its founders. The nunnery is famous for its 16th century miracle-making icon of the Assumption of the Mother of God and miracle-making spring and is annually visited by scores of thousands of pilgrims. At the request of Patriarch Alexi II of Moscow and All Russia LUKOIL will offer material support to the nunnery. The Patriarchate is considering the opening of a representative church of the nunnery in Kogalym, Western Siberia, where LUKOIL has built an Orthodox church.

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