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Political backing of CEZ-MOL deal denied

Czech PM Mirek Topolánek denied that the Czech government participated in setting up a strategic cooperation between Czech Energy Works (CEZ) and Hungarian gas company Mol. MOL prepares for prospecting with INA.

The government does not even have the right to influence CEZ’s decisions, even though the company does report to the state about the procedures, as two-thirds of the firm is state owned. The official rebuttal came in response to a report in Czech daily Hospodárske Noviny on Friday, saying the agreement between the two firms is a result of government negotiations. Leading Czech economical weekly Euro went even further to state that Toplánek and Hungarian PM Ferenc Gyurcsány personally discussed the matter via telephone. The motivation of the deal involving the sale of 10% of MOL’s shares is assumed to be a further defensive move against the merger efforts of Austrian peer OMV. The transaction is meant to be temporary, as Mol will buy this package back from CEZ later on.

Apart from the research and development co-operation agreement signed between the Hungarian oil company Mol and the Croatian oil company INA last Saturday, several talks on promising research areas in Hungary are ongoing between the two companies, Mol announced on the website of the Budapest Stock Exchange (BÉT). The two companies are currently carrying out explorations on an area of 189 square kilometers in the area of Potony-Novi Gradac, near the borders for a value of €8.2 million ($11.1 million). Based on the results of the search, in the H2 of 2008, prospecting drillings reaching 4,500 meters underground are to start and further optional drillings may take place next year, Mol says. (Gazdasági Rádió)