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MOL hopes no political motivation against Russian JV

Hungarian oil and gas company MOL hopes that there is no connection behind a procedure started by Russia's mining licensing agency against a joint venture in which MOL is a partner and the acquisition of a stake in MOL by Russian peer Surgutneftegas, MOL chairman-CEO Zsolt Hernádi said in an interview published in business weekly Figyelő on Thursday.

MOL hopes there is not political motivation behind the investigation of ZMB (the joint venture), Hernádi said.

The Russian agency for licensing hydrocarbon extraction has threatened to take MOL' extraction license for the Zapado-Malobalik field if it does not sell the gas it extracts there along with the oil, Russian papers reported on Friday. Industry insiders speculate pressure is being put on MOL to form a cooperation with Surgutneftegas, which bought a 21.2% stake in MOL from Austria's OMV on March 30. MOL's management termed the move “unfriendly“.

Hernádi told Figyelő that there was no political motivation behind the procedure by the licensing agency. The Zapado-Malobalik field is an important asset for MOL, but not so important that the company would change its strategy because of it, he added.

There has been practically no further contact between MOL and Surgutneftegas since MOL's AGM, Hernádi said. The company explained why Surgutneftegas could not participate at the meeting in a letter, he added.

Surgutneftegas has since sued MOL for excluding it from the AGM.

Hernádi said the narrowing margin between Ural and Brent crude is hurting MOL.

MOL's refineries are specially outfitted to handle cheaper, but heavier, Ural crude.

Thanks to developments at the refineries, they are now capable of competitively refining Brent crude, too, he said. MOL's refineries near Budapest as well as in Bratislava could be supplied through the Adria pipeline. Any such decision would be made only on the basis of business considerations, he added. (MTI-ECONEWS)