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LNT Chairman Rudolf Meroni: the Latvian State must protect its national interests

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Rudolf Meroni, the Chairman of the Supervisory Board of Latvija naftas tranzīts (LNT) the second biggest Ventspils Nafta shareholder cannot understand, why the Latvian government does not defend the national interest and resources in the case of the LatRosTrans crude oil pipeline.

BNN News from Baltic and Latvia: Rudolf MeroniLNT was for many years and continues to be one of the major players in the Latvian oil transit industry. Beside Vitol with 49%, LNT owns 39% of Ventspils Nafta. However, 11% of the Ventspils Nafta shares, formerly owned by LNT, are still in dispute. In 2006 disloyal managers defrauded these shares from LNT. 7% of the defrauded shares miraculously re-appeared in the Vitol portfolio. A criminal investigation is still going on in several countries, even though without much tangible results so far. In case LNT is successful in these proceedings, it will regain its position as the controlling Ventspils Nafta shareholder.

Over the last few weeks, LNT was unpleasantly surprised by the unilateral actions of Vitol. The LatRosTrans management, directed by Vitol, decided to empty the crude oil pipeline and, thereby, turning it practically into scrap. Vitol took this decision without even a single consultation with LNT. LNT vigorously resists these actions, even more because the ownership of the crude oil in the pipeline is not resolved. LNT believes, the oil in the pipeline does not belong to LatRosTrans, as it never figured in its balance sheet. Alvis Haze, Member of the LNT Supervisory Board pointed out: “If you want to earn money by using your truck for transportation, you will not sell its engine to get some short term cash to distribute dividends. Before we can even dream of using the pipeline again, somebody will have to invest 80-100 million USD to replace the missing oil, beside all the unresolved technological problems.”

The failure of the Latvian government to take appropriate action in the context of the oil pipeline issue is difficult to understand for LNT. The LNT Chairman Rudolf Meroni stated: “We are surprised that the Latvian state has not even begun to address the situation of the pipeline. The crude oil pipeline is one of Latvia’s strategic assets, which the country should protect with all forces. And even more so, because Belarus, one of Latvia’s key strategic partners in the transit business, is opposing the current activities regarding the pipeline. Moreover, neither the management of Ventspils Nafta nor LatRosTrans approached LNT to determine the view of the second-largest shareholder regarding steps of crucial strategic importance. Vitol’s unilateral actions significantly change the opportunities of Ventspils Nafta in the oil transit business. “Nobody asked our view about these steps. LNT, one of the largest shareholders in Ventspils Nafta, interested in the Ventspils business development, has been ignored by Vitol, to take such a significant and strategic decision.” said Rudolf Meroni.

The Latvian authorities must address the current situation and the resulting future consequences. Vitol’s actions are not based on a wise long-term business strategy. Only greed can lead to such unreasonable actions. The restoration of the crude oil transit through Latvia in the future will involve huge investment. “The question is simple: does Latvia want to participate in the crude oil transit or not? Belarus is ready to co-operate with Latvia in the oil transit, moving a part of Venezuela’s crude oil through Latvia. Nothing, however has been done about it from Latvian side – to the contrary, it seems that one of the major Latvian trumps in the competition for the Venezuela – Belarus oil transit has been given away for a shortsighted financial advantage” said Aivars Gobins, the LNT PR Director.

LNT calls on all parties to return to the negotiation table and try to resolve the situation according to normal business practice in the strategic interest of Latvia and Ventspils’ oil transit business.


Leave a reply

  1. Piter says:

    Has Latvia ever protected its national interests?

  2. Tiger says:

    Your awnesr shows real intelligence.

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