Hungarian oil and gas company MOL will continue its CAPEX program in 2012, and plans to spend HUF 2bn on developments next year, CFO József Simola told MTI after the company published its third-quarter IFRS report on Tuesday.
MOL plans to spend HUF 1bn on upstream production and the other HUF 1bn on other activities as part of the program next year, he said.
MOL reported that the company’s net income fell 60% to HUF 36.4bn in the third quarter from the same period a year earlier as margins narrowed and financial losses grew.
The result was far better than the HUF 32.7bn loss estimated by analysts polled by Portfolio.hu.
Simola attributed MOL’s strong results in the first three quarters of 2011 to greater profit contribution from the upstream segment at the international level, adding that the company’s downstream activities slipped into the red in the third quarter as a result of high oil prices and weak refining margins.
Continuingly high oil prices will provide MOL’s extraction operations with a boost, though will weigh on the company’s refining segment, Simola noted.
The fact that the earlier gap between Brent oil and Ural prices has closed to nil is reducing MOL’ profitability as the company has been primarily refining Ural oil in its refineries, Simola said.
The MOL CFO said he does not expect the external energy-sector environment to change significantly this year. He expects global oil prices to stay at around this year’s levels and only marginal changes in the refining market next year.
The current big gap between diesel and petrol margins could balance on the medium term, Simola said, projecting the refining margins at between $160-170 per tons for both products.