Hungarian oil and gas company MOL Nyrt. will reduce investments abroad and instead focus on assets closer to home in order to ride out the significant drop in oil prices, Berislav Gaso, the head of the upstream division at MOL, told Bloomberg in an interview yesterday.
In light of the drop in oil prices, MOL is remaining conservative and leaning towards assets and lowering spending in Hungary and Croatia, which account for 80% of the group’s portfolio, Gaso told Bloomberg. “Our priorities for this year are focusing on what we have, extracting value from the assets,” Bloomberg quoted Gaso as saying, adding: “I like barrels but I like dollars even more and in a $30 environment it is all about dollars when you operate in upstream.”
In the past two years, MOL, which is present in 40 countries, has expanded its operations into low risk areas such as the U.K.’s North Sea basin and in Norway where it won four new licenses last month, in addition to operations in Pakistan and Iraq.
MOL’s share prices dropped 1.6% yesterday, upping this year’s loss to 3.4%. The company’s stock gained 23% in 2015 after declining for two years.
Details on MOL’s output and investment targets including details of the writedown on its North Sea and Kurdistan assets will be published in its financial report to be released on February 24.
Oil prices are at their lowest in more than a decade and this slump is forcing many industry players to rethink their global investment strategies.