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MOL has enough resources for $1 bln acquisition, says CEO

Hungarian oil and gas company MOL has enough resources for an acquisition worth over $1 billion and is examining expansion targets in the region including Polish oil refiner Lotos, MOL chief executive József Molnár told the business daily Napi Gazdaság.

Speaking of the ongoing dispute over its ownership in INA, Molnár said MOL may offer the Croatian government treasury shares in exchange for shares in INA, which “could help toward solving the INA situation.”  Molnár said he regarded the attacks on MOL as part of an internal political warfare in Croatia.

At the moment "organic growth, and within that, quality growth gets more emphasis at MOL than acquisitions," business daily Napi Gazdaság quoted Molnár as saying.

However "we are still looking at opportunities in the region, even with regard to the geographically somewhat distant Lotos," Molnár said.

Poland expects to pick a buyer for its controlling stake in Lotos by early 2012. The government's 53% stake in the Gdansk-based refiner is worth around 3 billion Polish zloty ($1.08 billion) at market prices.

The capability of MOL to take out loans has improved recently since the Hungarian government bought the 21.2% stake in the company from Russian oil and gas company Surgutneftegas for €1.88 billion in a transaction closed on July 6, but "right now there are not too many firms for sale worth buying", the CEO said.

MOL's shares "can come in handy" in a resolution of the situation surrounding the company's Croatian subsidiary INA, and/or in any acquisition attempt whatsoever, Molnár said.

The CEO said MOL expected a gradual increase in fuel consumption, mainly in diesel consumption, where the company sees 3-4% annual growth on a sustained basis, while in petrol it forecasts 1-1.5% consolidated growth across its markets in the region.

MOL, which paid no dividend in the past two years, could return to its previous dividend policy at some point, although "in terms of the majority of our large shareholders, I think they are more interested in the stability (of the dividend) rather than the dividend itself," he said.

"In the future MOL can get nearer to its previously set dividend policy."

Answering a question relating to earlier implications that the company expects the Hungarian government to decide how and for what it wants to use its MOL shares, Molnár emphasized that the company "should work in the interest of its shareholders and the profit, regardless of any other consideration".

"MOL's got to have balanced relations with the government whether it is a shareholder or not", the CEO added.