On  September 25, 2003 JSC "Ventspils nafta" Supervisory Board approved

capital increase for its daughter company "Ventspils naftas termināls".

The  share capital will be increased by LVL 53.9 million via investment

in  kind  (investment  value confirmed by Ernst & Young Baltic) . Since

JSC   "Ventspils   nafta"  is  the  sole  owner  of  "Ventspils  naftas

termināls",   the  investor  will  receive  539,180  "Ventspils  naftas

termināls" shares.



The  investment  in  kind  is represented by the present JSC "Ventspils

nafta"  fixed  assets:  technical  and technological equipment that are

needed  for  oil terminal operations, such as tank pool, railway ramps,

pump stations, fire station, vehicle pool etc.



Alongside with the investment, new employment agreements will be signed

between  "Ventspils naftas termināls" and those employees of "Ventspils

nafta"  who are directly involved reloading of oil and oil products, or

supporting  the process. Also, and agreement will be signed between the

parent  company  and  the  daughter  company regarding leasing of fixed

assets needed for oil product transhipment business.  "Ventspils nafta"

will  cease  its  oil  product transhipment business with the moment of

making  the investment in kind. "Ventspils naftas termināls" will start

business from October 1. Financial statements will be consolidated with

"Ventspils nafta" financial statements starting with 2003.