MOL to Boost Share of Low-carbon CAPEX
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Hungary's MOL will raise its share of spending on low-carbon investments to 30-40% of total CAPEX in 2025-2030, an update of the oil and gas company's strategy for diversifying away from fossil fuels shows.
"MOL is committed to continue working towards climate neutrality along a smart transition path, also keeping an eye on energy supply security and economic competitiveness, besides sustainability," the company said on Wednesday, after its board approved the update of the Shape Tomorrow strategy.
MOL aims to leverage the cash generation of its upstream business to fund its group-level transformation, targeting average daily production upwards of 90,000 barrels of oil equivalent with unit direct production cost of USD 6-8/boe in 2025-2030. The main focus of the upstream business in the region will be to optimize production and infrastructure, while enhancing hydrocarbon recovery to contribute to supply security.
MOL will start deployment of low-carbon technologies in the field of geothermal, lithium extraction, methane emission reduction, and carbon capture, utilization and storage, while actively managing its international upstream portfolio "to maintain the right risk-to-return profile and the optimal overall resource and production level".
While petrochemicals continues to be an important driver of change in the downstream business, MOL said it was preparing to capture a wider section of the value chain to meet green ambitions, noting the launch of a waste management business in 2023.
MOL acknowledged that higher reliance on renewable energy sources, including green hydrogen and biogas, was set to become a key aspect of attaining low-carbon goals, but said the means and likelihood of entering those businesses would "very much depend" on their return profiles and the availability of market-based alternatives.
"MOL continues to be committed to diversify its crude mix further to be able to switch to alternative blends, should the need arise," the company said.
In its consumer services business, MOL said it would continue to shift its traditional fuel retailer role towards managing multi-purpose service stations while pivoting from product-driven to customer-driven operation. MOL aims to become the top mobility provider in the region by providing alternative fuels and by rolling out a platform that integrates its car-sharing and other mobility services with mobility solutions of its partners.
MOL expects the consumer services business to generate an annual EBITDA of USD 1 billion by 2030.
Commenting on the strategy update, MOL chairman-CEO Zsolt Hernádi said the company was seeking "smart solutions" rather than taking a "dogmatic approach".
"We are moving forward in a sober, pragmatic way enabling the green energy transition while uncompromisingly guaranteeing security of energy supply, the competitiveness of our company and value creation for our shareholders," he added.
Hernádi said MOL was doing "everything it can" to meet energy transition targets set by the European Union and to transform the company.
"But it is clear that it is not possible to do it alone and it is not fair if all the costs of the energy transition are passed on to industrial companies. Community goals can only be achieved with community support, smart regulation and cooperation on all level," he added.
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