February 2005, Still no investments by Lukoil in Beopetrol, production cut in half?

Association of minor stockholder of Lukoil–Beopetrol, if it agrees to what legal advisers suggested, will press criminal charges against Russian owner. The reason for this, as Branko Dragaš, economic counselor, confirmed, was compensation of damage inflicted to minor stockholders, which, according to the latest estimates, amounted to €1.26m in October 2004. Stockholder point out to the fact that production in Beopetrol has been cut in half since Lukoil purchased it. Thus production decreased from 400,000 to 200,000 tons per month.

Minor stockholders will wait auditing company, which keeps the record of Lukoil's operations, to deliver new results of supervision of this company's operations to the Privatization Agency.

Privatization Agency confirms that the last report, which was delivered by this auditing company, was full of illogical spots. The company got new deadline of about 10 days to take the report in consideration one more time. All these actions have one aim, which is presentation of the real reasons for absence of Lukoil's investments in Beopetrol for more than year and half and the reason why realization of sales contract worth €117m has not started yet.

Branko Dragaš says that even he is not sure why this Russian company, which invested so much money in additional capitalization, did not do anything in the meantime, except for the fact that Beopetrol lost his position on the market. Such, mildly speaking, inertness of management of Lukoil can be explained, Dragaš points out, with ruined political agreement, which was made between former management and the new owner of Beopetrol, just before the elections in December 2003.

According to the contract, Lukoil was supposed to pay €41m to the State in 2004 due to avoiding of obligations. It is still unclear why people in charge pay no attention to this, because it could cover many pension and social care obligations.