Breaking News: Hungary Mol receives crude oil from Azerbaijan

A shipment of crude oil extracted from the Azeri-Chirag-Gunashli oil field in Azerbaijan, which is partly owned by Mol Group, is on its way to the Slovnaft refinery in Bratislava, the company said in a statement. The tanker Seavelvet transported the 90,000 tonnes of oil from the port of Ceyhan in Turkey to Omisalj in Croatia, which will then be transported via the Adriatic pipeline to Bratislava.

The press release highlights that

Mol has thus created a fully integrated value chain, i.e. it will be able to sell petroleum products processed in its own refinery from oil extracted from a field it owns.

The shipment was transported from the Sangachal oil terminal near Baku to Ceyhan via the Baku-Tbilisi-Ceyhan (BTC) oil pipeline, which is also partly owned by Mik Group.

Mol has a 9.57% stake in the Azeri-Chirag-Gunashli (ACG) oil field, and an effective 8.9% stake in the BTC pipeline. Processing of the Azeri Light crude oil will start in April.

Slovnaft's refinery has successfully tested a variety of oil from the Middle East and the Caspian Sea region, but the refining of oil from its own fields is another important milestone in the life of Mol Group, which could increase its oil supply flexibility in a time of EU sanctions banning the export of petroleum products of Russian origin.

"The arrival of the Azeri Light oil shipment is a very important event for us, and it shows the flexibility we have achieved in the procurement of oil.

It also gives us the opportunity to cover our entire value chain, from production to sales, which is always a major achievement.

[...] we are particularly pleased to be able to contribute our own oil to the supply of Central and Eastern Europe," said Gábriel Szabó, Managing Director of Mol's Downstream business.

Mol Group intends to become an increasingly important economic link between Azerbaijan and East-Central Europe, according to the statement.

"This shipment is a historic milestone as it reinforces our decision to become a part owner of the ACG oil field in Azerbaijan. Our ability to supply our refineries with oil resources from outside Europe gives us additional flexibility in this period of rapid change. We therefore have the flexibility to decide whether to sell our share of the oil extracted at ACG or to supply it to the Central and Eastern European region, which is our core region, contributing to the security of energy supply," said Zsombor Marton, Managing Director of the Upstream business of the Mol Group.

Mol is the third largest investor in the ACG project behind BP (30.4%) and SOCAR (25%). ACG is also operated by Chevron (9,57%) INPEX (9.3%), Equinor (7.3%), Exxon (6.8%), TPAO (5.7%), Itochu (3.7%), and ONGC (2.3%). The ACG field represents 15% of Mol Group's total production and 25% of its total reserves.

THE BTC PIPELINE COULD ALSO PLAY AN IMPORTANT ROLE IN SUPPLYING THE MOL GROUP'S REFINERIES IN POZSONY AND IN százHALOMBATTA REFINERY IN HUNGARY,

they write in the press release. In addition, Mol will continue to import Russian petroleum products through the Friendship pipeline.

Investors may have already suspected something before the announcement, as Mol shares have performed well all day, somewhat against the general market sentiment. The shares are currently up 2.7%, but we have seen a bigger rise during the day.

Turnover was also above average, with HUF 1.45 bn of Mol shares exchanging hands today. (The green line is today's turnover and the grey area is the average turnover with Mol shares over the past 30 trading days.)

Cover photo: TASR