MOL could start production in Mako 2012-2014

MOL and ExxonMobil said on Monday, they were teaming up to explore for unconventional oil and gas in the Mako Trough. The two companies will drill 4-6 new wells in the area as well as reopen exiting wells in 2008-2010. The fields contain about 340 billion cubic meters of gas, 30% of which is economically recoverable, the Hungarian company said. “We are working within a global tendency. MOL is trying to take advantage of having control over the largest Hungarian areas that can be fit for unconventional production. You need the current gas prices for this.” Hungary imports most of its gas from Russia, making it Gazprom’s biggest customer in Central and Eastern Europe, according to the Russian company’s data.

According to the agreement signed April 11, Exxon will fund the project and split the results equally with MOL. It may take as long as 40 years to explore the Mako Trough gas field, with the partners expecting to drill some 50 wells a year, said Attila Holoda, MOL’s director of Eurasia exploration and production. The cost of surface equipment will be as much as $28 million, with an additional $11 million per year for operating them, according to MOL estimates. Production costs will probably be about $2 or $3 per barrel of oil equivalent with each well costing $8 million to $12 million, the company said in a presentation distributed at the press conference. MOL and ExxonMobil are sharing the cost and revenue in the western part of the Mako Trough in equal part. They are participating in an equal three-way split with UK peer Falcon in the eastern part. If the unconventional hydrocarbons are to be extracted profitably, global oil prices must be above $100 per barrel. (MTI-Econews, Bg)