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Hungary’s MOL Eyes Expansion From The Shores Of Norway To The Fields Of Kurdistan

By Tamás Székely // 2015.07.09.

Hungary’s oil and gas group MOL has announced the successful closure of the acquisition of Ithaca Petroleum Norge (IPN). IPN, that will become MOL Norge, is pre-qualified as operator in Norway. Its portfolio includes 14 licences on the Norwegian Continental Shelf (NCS), out of which 3 are operated by IPN. The deal doubles the size of MOL Group’s exploration portfolio, adding over 600 million barrels of oil-weighted net unrisked prospective resources. The committed work program contains three exploration wells in 2015-2016. IPN’s strong exploration-focused team with deep experience of the NCS is also part of the deal.

The transaction provides an excellent starting point for MOL to enter Norway, Alexander Dodds, Group Executive Vice President for Upstream told reporters. “Entering Norway as one of the most investor friendly countries is an important milestone in our E&P Strategy. Norway will become a key exploration hub for MOL Group in the future and will help us to achieve our goal of becoming an offshore operator in the North Sea. We believe Norway has a best-in-class approach to exploration, and with MOL Norge we will have an excellent team in place”, Dodds added.

MOL also announced that the rolling production average from Kurdistan’s Shaikan field for the past two months has been 38,000 barrels per day and a new daily production record of 44,600 was established on 21 June 2015. Cumulative production from the field has now surpassed 13 million barrels of oil. According to the current expectation of GKP production will remain within the range of 36,000-40,000 bopd between now and the year end, subject to offtake. MOL said it would continue to make progress towards a regular payment cycle for its current production.

In line with the recently announced new contract with the domestic buyer and further to the first payment of USD 4.9 million gross received last week, an additional payment of USD 6.7 million gross has now been received for crude oil exported in June 2015 by truck to the Turkish coast. In addition and in line with the stated diversified marketing strategy, GKP expects in the near future to commence trucking Shaikan crude 120 km to Fyshkhabour on the Turkish border where it will be injected into the export pipeline to Ceyhan. Once injection into the pipeline at Fyshkhabour commences and a payment mechanism for this production is established with the Kurdistan Regional Government’s Ministry of Natural Resources (“MNR”), Shaikan crude will be sold as part of the internationally traded blend and higher netback prices should result.

As for MOL’s business activity in Central Europe, its share of Romania’s fuel market had reached the target of 15%, managing director of MOL’s local unit Kinga Daradics said in Bucharest. MOL closed the acquisition of 42 ENI Romania petrol stations in February, raising its number of retail units in the country to 208. MOL Romania’s retail sales climbed 7% in the first quarter from the same period a year earlier.  In May Czech media reported that MOL was looking to further strengthen its position on the Czech market as well. MOL owns currently more than 300 petrol stations in the Czech Republic and it is waiting for a chance to purchase other petrol stations in the country.

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