Mol caught in Yukos fallout?
Wednesday, March 16, 2005, 00:00
The Russian police arrested Oleg Vitke, the head of the upstream joint venture of Russian oil indsutry giant Yukos and Hungary?s Mol Rt, on suspicion that the company violated technology regulations in the production process, Mol?s corporate communications director Szabolcs I. Ferencz said. Mol and Yukos have a 50%-50% stake in ZMB, which is active in the Zapadno-Malobalyk oil field. In the information of wire agency Reuters, which was confirmed by Ferencz, the joint venture accounts for approximately 50% of Mol?s oil production and has significant exploration activities as well, therefore its future is a crucial factor for the Hungarian parent company. Ferencz denied the news of Russian daily Vedomosti that ZMB?z rigs produced oil in excess of the permitted amount, saying that the company always had its plans approved by mining authorities. According to market sources, it is widely known in industry circles that Mol has recently made substantial investments in the region and brought forward several projects. Increasing production within reasonable limits has allegedly enjoyed the support of the Russian government as well until now. Although Vitke is expected to remain in custody for two months according to Vedomosti, Ferencz said the arrest did not disrupt production at the company, which is now managed by Vitke?s deputies. Mol trusts that Vitke will be soon cleared from the charges. As to whether the incident could possibly have any connection with the power struggle of the Russian government and the management of Yukos, Ferencz refused to express an opinion.