MOL Hungarian Oil and Gas Public Limited Company (MOL) hereby informs the capital market participants that in line with the company’s portfolio optimization, MOL is close to finalizing the deal of selling 49% share of BaiTex LLC (BaiTex) to the Turkish Petroleum Corporation (TPAO). BaiTex is the holder of the hydrocarbon licenses for Baituganskoye field and Yerilkinsky block in the Volga-Ural region, Russia.
The final completion of the deal is expected to occur within the next month. The divestiture is in line with MOL’s long term portfolio management and risk sharing strategies as the Company looked for a strong partner in BaiTex.
MOL acquired its interests in Baitex at the end of 2006 and after initiated field development program the Company almost doubled the booked 2P reserves of the block at the end of 2011. As a result of the transaction, MOL Group’s SPE 1P and 2P reserves expected to decrease by 37 MMboe and 54 MMboe, respectively. Average production of the Baitugan field was 6.6 mboepd in 2013. As 51% owner of the Baitex company, MOL will remain as the operating shareholder. After the closing Baitex will be consolidated proportionally, in line with MOL’s accounting policies.
Besides TPAO’s investment in BaiTex, TPAO and MOL are in active discussions to identify other potential upstream co-operation opportunities and lay the foundations for a future strategic partnership, which could utilize TPAO’s and MOL Group’s well-established presence in the international oil industry.
MOL remains very committed to continue its operations in Russia and has the financial flexibility to re-invest in promising new upstream assets to provide future growth.
Alexander Dodds, Group Executive Vice President for Upstream commented:
“This step is fully in line with our portfolio modernization strategy and we really welcome TPAO not just as co-owner of the Baitugan project but as a strong partner as well. This partnership is well beyond this transaction as both companies have a definite intention to establish a long lasting strong and active partnership. We are planning to jointly pursue E & P opportunities not only to share the risks, but for active knowledge-transfer as well. This could be valid for other countries as well as Russia, which is still considered a core country for MOL.”
