Friends from the east

Poland's largest oil refinery revealed it is in talks with a number of Russian companies to set up a consortium to buy Lithuania's Mazeikiu Nafta (MN).

The Lithuanian government currently holds 40.66 percent in MN, while Russia's Yukos controls 53.7 percent. Yukos has already announced its intention to sell its stake.

"This is possible and this is a good idea [to team up]. We are holding talks but I can't give you the names," said PKN Orlen's general director, Igor Chalupec. The firm did not reveal how much it was willing to pay for MN.

Although Yukos has the largest stake in MN, the Lithuanian state has the final say on who the buyer will be. Lithuania is looking to ensure stable energy supplies in the wake of troubles at Russian oil giant Yukos.

Last month, the Lithuanian government said the preferred bidder was TNK-BP, a Russian joint venture of British oil firm BP. Legal suits brought by Yukos' creditors in the Netherlands, which is home to the holding company that controls the foreign assets of MN's mother company, could also further complicate the deal.

Chalupec also revealed that PKN Orlen is considering taking part in oil exploration and production projects in Russia. "We are still at the early stages - we are only preparing an investment plan," he said. Chalupec said that interest in oil production in Russia is "logical ... Our oil refineries mainly refine high-sulfur oil." Almost all of the 14 million tonnes that PKN Orlen refines annually comes from Russia. (Reuters)