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Mol buys out its Russian joint venture for $15.5 mln

Hungarian Oil and Gas Mol Nyrt, Hungary's largest energy company, has signed sale and purchase agreement with Russian North-West Oil Group (NWOG) on the purchase of 100% of the NWOG-MOL project company for a consideration of $15.5 million on October 9, 2006. The closing of the transaction requires the completion of different conditions, including the approval of the Russian Competition Office. The exploration license of the Surgut-7 block is the sole property of the NWOG-MOL project company. The Surgut-7 block is located in the central part of Western-Siberia, approximately 10 km to the south-east from the area of the ZMB oilfield. The exploration area covers 330 km2 and is surrounded by several large oil fields (ZMB, Malobalyk, Sredne Balyk, Chupalskoye), the reserves of which are between 15 million and 75 million tons.

The infrastructural provision of the area is good, the main pipeline passes at 8 km from the border of the block. The surface facilities of the ZMB field may provide synergy in case of a discovery. The exploration period is 4 years, which may be followed by an 18 years production period. The work program requirement is 300 km 2D seismic acquisition and the drilling of one exploration well. The license has been won by NWOG on an auction. The cost of work program is approximately $6 million. Zoltán Áldott, executive vice-president of the Exploration and Production Division commented: “Besides the very successful ZMB production project, our Company assigns important role to the acquisition of further prospects in its Russian upstream strategy, in order to establish future production. The Surgut-7 block’s geographical location, its vicinity to the ZMB field is a promising opportunity for MOL to extend its activities in Russia.” (bet.hu)