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MOL pays no dividend; Surgutneftegaz still barred from voting

Shareholders of Hungary' top oil and gas company MOL voted to pay no dividend on the company's 2010 profits at MOL's Thursday annual general meeting, which once again took place without the participation of 21% owner Surgutneftegaz.

MOL's board of directors proposed to pay no dividend for the third year in a row, citing the need to finance the company's ongoing investment projects. These include upgrading the group's Rijeka refinery (operated by Croatian affiliate INA), and developing its oil and gas fields Syria, Iraqi Kurdistan and Russia, among others.

"This portfolio carries within it the possibility of organic growth," József Molnár, MOL's Chief Financial Officer told shareholders. "In order to retain our conservative balance sheet approach and enable organic and inorganic growth, the board is proposing the payment of no dividend."

The dividend proposal was approved with 84.4% of shareholders present. MOL recorded HUF 103 billion net profit in 2010 according to Hungarian Accounting Standards.

Shareholders present at Thursday's AGM, who represented 47% of all MOL shares, also elected a new member to MOL's board of directors following the resignation of outgoing CEO György Mosonyi, who will continue to serve on MOL's supervisory board.

Molnár, who will replace Mosonyi as MOL's CEO as of May 1, said the MOL group will spend $1.8-2 billion on investments in each of the coming years, mostly on organic growth in the upstream (exploration and production) segment. However, MOL will also carefully assess acquisition opportunities, he added.

Chairman and CEO Zsolt Hernádi noted that Surgutneftegaz once again could not take part in the AGM as the Hungarian Energy Office (MEH) has not registered Surgutneftegaz's MOL shares. The MEH earlier declined to register the Russian company's request after it failed to reveal its ownership structure. (BSz)