MOL (company)

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MOL Hungarian Oil and Gas Public Limited Company

Type	Public Limited Company
Founded	1991
Headquarters	Budapest, Hungary
Key people	Zsolt Hernádi, CEO György Mosonyi, GCEO
Industry	Oil and gas
Products	Oil, natural gas, petrochemicals
Website	www.molgroup.hu/en

MOL Magyar Olaj- és Gázipari Nyrt. (MOL Nyrt., English: Hungarian Oil and Gas Public Limited Company) is Central Europe's leading independent integrated oil and gas group with interests in exploration, production, refining, marketing and petrochemicals. MOL, which employs over 15.000 people, is a market leader in each of its core activities in Hungary and Slovakia, and is one of the 10 largest companies in Central and Eastern Europe.^[1]

MOL Nyrt. is a public limited company listed at the Budapest Stock Exchange (BUX), Luxembourg Stock Exchange and Warsaw Stock Exchange, and its GDR's are traded on London's International Order Book and on OTC Bulletin Board in the United States. As of 30 June 2008, MOL Nyrt. has market capitalization of US$14.8 billion.^{[citation needed]}

Contents 1 History 2 Operations 2.1 International upstream operations 2.2 Strategy 2.3 Sustainability 3 Key financial data 4 Recognitions 5 References 6 External links

[edit] History

MOL Rt. was established on 1 October 1991 through the merger of 9 companies—former members of the National Oil and Gas Trust. By 1995, the actual integration of companies was completed, and the previously separated entities started to operate within one joint organization. MOL went for a privatization strategy in order to respond to international market challenges and also, it pioneered in the regional consolidation of the oil and gas industry.

In 2003, MOL purchased a 25% stake in Croatia's national oil company INA.^[2] In 2006 INA and MOL launched a joint exploration project in the Slatina - Zaláta area designed to secure new volumes of natural gas. The two companies are now forming a consortium in Bosnia and Herzegovina, after winning the recapitalisation tender for Energopetrol, the leading petrol company of Bosnia and Herzegovina,^[3] where they got an absolute majority by helding 67% of the shares. The reaming 23% is divided between the federal government of B&H (22%), and several minor shareholders (1%).

By 2004, MOL bought in several steps Slovakia's national refiner Slovnaft, and Hungary's leading producer of ethylene and polypropylene TVK, over which MOL gained control with a stake of 34.5%. in 2001. MOL further increased its stake in TVK to 86.56% in 2006. Between 2003 and 2005 MOL completed the acquisition of Shell Romania. In 2004, MOL entered the Austrian market by purchasing a fuel storage facility in Korneuburg, and a year later by acquiring the Roth filling station chain.^{[citation needed]}

In August, 2007 MOL purchased Italiana Energia e Servizi S.p.A. (IES), owner of the Mantova refinery and a chain of 165 retail stations in Italy. ^[4] In November 2007, MOL reported a new regional initiative to create a joint regional gas pipeline system called New European Transmission System (NETS). On 20 December 2007, MOL announced a strategic cooperation with Czech power utility CEZ. The joint venture with CEZ will focus on gas-fired power generation and related gas infrastructure in Central and Southeastern Europe, first launching two 800 MW power plants in Hungary and Slovakia. After selling 7% of its shares to CEZ within the scopes of a strategic partnership, MOL announced on 10 March 2008 the sale of an 8% stake to the Oman Oil Company for the same reason.^[5]

In June 2007, Austrian energy company OMV made an unsolicited bid to take over MOL, which has been rejected by the Hungarian company. On the 6th of March in 2008, The European Commission launched an in-depth investigation of OMV's unsolicited bid to take over MOL. As commented by European Commissioner Neeile Kroes, the "proposed acquisition may raise competition concerns in a number of markets".^{[citation needed]} On 24 June 2008 OMV received a 'Statement of Objections' from the European Commission regarding the company's attempted takeover of MOL.^[6]

On 23 July 2007, MOL signaled that it could reconsider merging with Poland's PKN Orlen. It was seen as a reaction to the attempt of hostile takeover by Austria's OMV.^[7]

On 18 January 2008, MOL signed a Memorandum of Understanding with the Indian ONGC^{[citation needed]}. In the Memorandum of Understanding MOL and ONGC have laid down the basis of a broader cooperation in exploration and production projects in India and elsewhere, as well as in the field of technology transfer and professionals exchange.

In March 2009, OMV sold its 21% stake in MOL to Surgutneftegas. MOL called this move "unfriendly".^[8]

[edit] Operations

The company is a key player in the upstream business with over 70 years experience in Hungary and 15 years in the international arena. The Society of Petroleum Engineers approved 2P (proved plus probable) reserves were 340.6 MMboe and MOL's hydrocarbon production was 90.4 Mboe/day in 2007.^{[citation needed]}

MOL operates three refineries (336,000 Bbl/day refining capacity) with outstanding product yields and with retail and wholesale activities supported by an extensive crude and product pipeline system. Its refineries at Százhalombatta, Hungary and Bratislava, Slovakia, are among the most profitable in Europe, thanks to residuals processing technologies, which allow fuel oil to be almost entirely eliminated from the product mix, meaning more profitable gasoline and diesel fuel can be produced. MOL's filling stations amounted to 1000 at the end of 2007.^{[citation needed]}

MOL's petrochemical division is one of the largest polymer producer in Central Europe, operated in full integration with MOL's Refining & Marketing division. Its products are sold in more than 40 countries.

For the natural gas division, the main focus is gas transmission via an extensive high pressure gas pipeline, which length exceeds 5,000 kilometres (3,100 mi).^{[citation needed]}

[edit] International upstream operations

MOL has foreign exploration licences in (with date of announcement):

• Yemen, Exploration Blocks ’48’ and ’49’, 2002
• Kazakhstan, Federovskoye Block, 2004
• Croatia and Hungary, Slatina and Zaláta, 2006
• Baituganskoe Oilfield, Surgut-7 block and Matjushkinsky block 2006-2007
• Cameroon, Ngosso Permit Block, 2007
• Iraq, Akri Bijeel Block, 2007

MOL has foreign production facilities in (with date of announcement):

• Russia, Zapadno-Malobalyk oil field (with Yukos, later Russneft) 2002
• Pakistan, Tal Block, 2004

[edit] Strategy

By 2010, MOL aims to triple its hydrocarbon production and double its sales of refined products. The company’s objective is also to continue develop the group with a focus on growth, efficiency, and financial flexibility. In 2007, MOL accepted a new organic growth strategy to complement the company’s acquisition efforts.

[edit] Sustainability

MOL has been integrating sustainability principles into its strategy and daily operations for years. The company has a Sustainable Development Committee headed by the Group CEO. MOL is assessed by the Dow Jones Sustainability Index and is a member of the UN Global Compact. MOL has been making efforts to develop renewable energies. The company has been researching the potential of leveraging geothermal energy together with partners Australian-based Green Rock Energy Limited and Icelandic Enex hf in Hungary. Icelandic Enex hf dropped out after the recent financial crisis in Iceland. The company supports the research of second generation biofuels at the University of Veszprém.^{[citation needed]}

[edit] Key financial data

Key financial data, IFRS (HUF bn)	2006	2007
Net revenue	2891.1	2594.0
EBITDA	542.4	496.0
Operating profit	409.6	355.5
Operating cash flow	529.5	315.5

MOL produced the highest growth in shareholder return among peers in Europe (Bloomberg data and MOL research (based on figures 01.01. 1996 – 30.09. 2007).^{[citation needed]}

[edit] Recognitions

MOL was awarded as ‘The most investor-friendly oil company in CEE’ by the Institutional Investor Magazine and ‘Best Investor Relations of Hungary’, by the IR Magazine.^{[citation needed]} In 2007, based on net income/barrel indicator, the company proved to be the most efficient oil producer in Europe (John. S. Herold: Global Upstream Performance Review) and the most efficient refiner in Europe (based on net cash refinery margin, Wood MacKenzie, Global Refinery View Service).

MOL’s contribution to sustainable development and a healthy working environment was awarded several times. In 2007, the Group deserved the Central European Environmental Reporting (a.k.a. ‘Green Frog’) award from Deloitte Hungary and the Healthy Workplace Amcham Award, along with the recognition of the European Network for Workplace Health Promotion. In 2007, MOL was the Business Donor of the Year in Hungary (Hungarian Donors Forum) and The most generous company in Romania judged by Romanian Donors Forum, respectively.^{[citation needed]}

[edit] References

[edit] External links

• Official website

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