Hungarian MOL sues Croatia again: they want euro millions!

The Hungarian oil and gas giant, MOL, has initiated a procedure at the International Centre for Settlement of Investment Disputes (ICSID) against the Croatian state.

According to 24.hu, MOL has taken action against Zagreb, alleging that the Croatian government pressured INA, their Croatian subsidiary, to sell extracted natural gas to the Croatian company Hrvatska elektroprivreda (HEP Group) at a low price.

During the energy crises of 2022 and 2023, the Croatian government set gas prices at EUR 41/MWh, later increasing them to EUR 47. However, MOL claims that this decision was unlawful and caused financial damage to the company.

MOL owns and operates INA

The Croatian newspaper 24sata questioned why MOL initiated the procedure instead of INA, which they own. MOL holds a 49.08% stake in the INA Group and has operational rights, while 44.84% of the Croatian company is owned by the Croatian state.

INA fuel station in Croatia. Source: FB/INA

MOL issued a brief statement after the Croatian paper reported on the issue, but they did not provide further details.

According to sources close to MOL, the Croatian newspaper reported that the Hungarian company had attempted multiple times to settle the issue peacefully with the Zagreb government. However, Croatia’s Minister of Economy, Davor Filipovic, refused to negotiate. Consequently, MOL had no choice but to seek international arbitration, submitting their appeal to the ICSID in Washington.

MOL complains about exaggerated and law-breaking Croatian measure

MOL did not disclose the value of the procedure, but unofficial sources estimate it to be tens of millions of euros.

MOL believes that the Croatian government pressured INA to sell natural gas at only a fraction of the market price to HEP, with the cheap gas costs being absorbed by INA and MOL.

MOL Campus ‘skyscraper’ in Budapest. Photo: facebook.com/molcampus

MOL argues that the measure was baseless, unlawful, and exaggerated. The European Commission had warned Croatia about it, but Mr Filipovic defended the measure, claiming it helped 120,000 consumers access gas. Moreover, hospitals, kindergartens, local governments, and public institutions could obtain cheaper gas.

This marks the fourth international arbitration procedure between MOL and Croatia. Croatia has already lost two of the previous cases.

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Featured image: MOL CEO Zsolt Hernádi