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Hernádi: MOL to diversify business in future

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Oil provided an opportunity to establish a market presence, but growth opportunities centered around petrol and diesel trade are limited while an oil refinery produces 50 other products that can be used in chemical plants or sold off in more than 40 countries, MOL chairman-CEO Zsolt Hernádi said in an interview with Hungarian news agency MTI today, speaking about the company’s strategy.

MOL chairman-CEO Zsolt Hernádi speaks to MTI today. (Photo: MTI / Kovács Tamás)

Aside from expanding its retail operations in the region, MOL is already considering developing its value chain as an integral part of its strategy. The inauguration of a HUF 35 bln butadiene plant in Tiszaújváros, eastern Hungary, a few days ago, the synthetic rubber plant under construction and the continuous improvement of the efficiency of the various divisions are all part of that plan, said Hernádi.

The chairman-CEO noted that regional expansion opportunities have their limits. In the downstream industry PKN Orlen, OMV and MOL have emerged as dominant players, but further market concentration would lead to competition concerns, which makes it probable that things will remain like this in the long term.

Hernádi said MOLʼs operations are still centered around Central and Eastern Europe, despite write-downs in Syria proving to be the biggest financial loss and the performance of the upstream segment in Pakistan the biggest success for the company recently.

Due to low oil prices, MOL is recalculating the profitability of every element of its portfolio, but with its financial background, this does not necessarily mean they will have to sell assets. MOL is still spending considerable amounts of capital on exploration and they will only consider selling licenses where there are serious doubts.

The chairman-CEO talked about the future of MOLʼs stake in Croatian oil and gas company INA, saying MOL is not in a position to buy in part or in whole the Croatian governmentʼs share in INA until the government creates an investor-friendly environment and strives for cooperation with INA. Hernádi also noted that several parties have expressed interest in buying MOLʼs stake, with the latest offer made this spring.

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