The company currently buys 11 million tons of Russian oil a year.Continue reading
MOL has agreed on the supply of crude oil from Russia, the company announced on the website of the Budapest Stock Exchange. The Hungarian oil and gas company has signed agreements with oil suppliers and pipeline operators to ensure the continuous supply of crude oil via the Friendship pipeline from Russia, through Belarus and Ukraine, to Hungary and Slovakia.
Following the agreements, the MOL Group will take over ownership of the relevant volumes of oil from Russia at the Belarusian-Ukrainian border with effect from September 9, 2024.
The updated transportation agreements and the new takeover arrangements of the crude oil fully comply with all relevant sanctions and provisions, including those of the EU and Ukraine,
reads the company’s statement.
Gabriel Szabó, MOL Group Downstream Executive Vice President, said that the new arrangement provides a sustainable solution for crude oil transportation on the Friendship pipeline. “I consider this a great achievement as it allows for MOL to continue with the most efficient and reliable crude processing technology in refineries in Hungary and Slovakia and ultimately contributes to the security of supply in both countries,” he added.
As reported by Hungary Today, Ukraine imposed new sanctions against Russian oil giant Lukoil in June, blocking the Friendship pipeline. Since July 18, Ukraine has not allowed Lukoil oil to pass through its territory. Hungary and Slovakia have lodged complaints with the European Commission, however Brussels has put the issue on ice after it said there was no real problem. In fact, the opposite was perceived to be the case, as the decision caused supply problems and could have caused even more if MOL had not resolved the situation.
Világgazdaság notes that MOL’s valuation would fall by 20-25% if Russian oil supplies from Ukraine were to stop before the planned investments are completed, from the beginning of next year. According to an analysis by Erste Bank, the closure of the Friendship oil pipeline could cut up to USD 1 billion from the Hungarian oil company’s annual profit.
Via Világgazdaság, Featured image: Facebook/MOL