MOL extends with a landmark transaction its upstream portfolio by entering the attractive North Sea region on last week. The offshore assets are acquired from the German BASF Group member Wintershall and are located in the UK North Sea basin. The deal is of strategic value as MOL intends to enhance its offshore experience and achieve further growth in this region, while immediate reserve addition and sizeable mid-term production growth are also realized.
In line with the company’s active portfolio development strategy, MOL has executed Share Purchase Agreements with Wintershall for acquiring Wintershall’s interests in selected UK North Sea basin offshore assets with 14 licences. The transaction provides MOL with an opportunity to acquire a foothold on the attractive North Sea area.
“This is a milestone in MOL’s history. The North Sea is the right region for us to make this strategic move. We are sending a clear message to our investors and our competitors that MOL Group is serious about expansion and is able to grow in new areas. The North Sea is a well-developed area and carries relatively low political risk compared with some of our other investments, which reduces MOL’s overall E&P “political risk” profile, and the United Kingdom provides a predictable and transparent regulatory environment.” – said MOL Chairman-CEO Zsolt Hernádi at the signing ceremony.
The deal consists of a well-balanced portfolio that allows MOL to maintain and increase its overall production level while simultaneously to balance the company’s overall geographical presence and the associated risks. Furthermore it also provides MOL with a core around which it can further group other exploration, development and production phase assets.
The extensive infrastructure in place will enable new discoveries to be developed rapidly via existing facilities and also help make smaller accumulations more attractive for development. In addition, MOL Group will have access to participate in upcoming future bid rounds in the United Kingdom, while parallel the transaction facilitates for entering into close cooperation with reputable offshore operators, possibly paving the way for further joint projects.
Alexander Dodds, MOL Group Executive Vice President for E&P, added: “The UK and especially the acquired assets fulfilled all of our expectations and criteria for our investment both from a technical, financial and strategic point of view. We believe with this strategic move we are creating a momentum, which can be exploited to accelerate MOL’s offshore E&P activities. We are serious about our upstream expansion and we will continue to grow and deliver positive results within this segment of the industry, both in the North Sea and our other core areas. This will deliver a major step change.”
Parallel with the transaction, MOL and Wintershall also signed a strategic cooperation memorandum to develop their partnership and jointly pursue E&P opportunities in both the North Sea and the Middle East region. Both companies have a definite intention to establish a long lasting strong and active partnership and knowledge-transfer to utilize vis-a-vis each other’s expertise and experience in regions previously not present in their core regions.
“Europe’s supply security begins on its own doorstep, in the North Sea. Not only is it the world’s fourth-largest E&P region, it is also one of the most stable. Furthermore, it still holds great potential, as the discoveries in the last few years have shown,” Rainer Seele, CEO of Wintershall, explained. “We appreciate, that another European partner, MOL, is becoming active in the North Sea. We look forward to working together.”
Photo: hataratkelo.postr.hu, mol.hu