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MOL scrutinizes investments in light of lower prices

Automotive

Hungarian oil and gas company MOL will only launch investments that it can recoup, calculating with oil and gas prices at present and in the mid-term, Hungarian economic daily Világgazdaság said yesterday. MOL will halt investments that are no longer worthwhile due to low oil prices, the paper said. 

MOL and its peers around the world are re-examining their production portfolios, MOLʼs chief for exploration and production Tamás Szakál told the paper. This year, MOL targets a 5% drop in domestic hydrocarbon production, at most, Szakál said. He added that the target was "ambitious", considering that output of fields in Hungary was winding down.

MOLʼs production still accounts for one-third of domestic gas consumption and one-tenth of oil consumption. MOL announced last week that it had "significantly reduced" the geological potential of a license it operates in the Kurdistan Region of Iraq.

MOL said it expects the completion of a report on the block to trigger write-downs of past investments there in its Q3 2015 earnings statement. The total book value of investments in the block on MOLʼs consolidated IFRS balance sheet comes to $440 mln, it added.

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