Geopolitics Abounds in MOL Sale

On March 30 Austrian oil refiner OMV confirmed that it had sold its 21.2% stake in leading Hungarian independent player MOL to Russian oil producer Surgutneftegaz, in a EUR1.4bn (US$1.85bn) deal that represents the cash rich and hitherto reclusive firm's first foray into international markets. According to a statement by Surgutneftegaz CEO Vladimir Bogdanov, the deal marks a step towards fulfilling the company's aim to 'strengthen vertical integration and achieve maximum proximity to end users'. However, the sale to a Russian company with close links to the Kremlin of a stake that will give it a strategic foothold in Eastern Europe comes at a time when, conversely, most countries are seeking to reduce Russian influence over their energy sectors following the January 2009 Russia-Ukraine gas dispute. When combined with the high price that Surgutneftegaz has paid for the stake (HUF19,212 a share - a more than 200% premium to MOL's March 27 close), this has led to speculation that strategic or political considerations may have been a factor in motivating the deal.

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