The CEOs of MOL and Gazprom discussed developing the cooperation between the two companies, Gazprom announced in a press release after the meeting. The expansion of cooperation in hydrocarbon extraction and Russian gas transit across Hungary was on the agenda. The parties also considered the possibility of construction or upgrading the existing gas storage facilities in Hungary. Regarding potential upstream cooperation, the Russian press has speculated that talks might have included potential cooperation at Udmurtneft field, which is expected to be sold to Gazprom’s Sibneft.
We believe its very likely that a large deal has been forming. E.On is going to sell a large stake in Hungarian gas assets to Gazprom, while MOL is eyeing upstream assets, potentially in cooperation with Gazprom. In the meantime, the Hungarian PM called Mr Putin on Sunday to discuss various agreements regarding the economic cooperation of the two countries. This could further boost speculation on a sizeable deal, which requires political support.
We maintain our Buy recommendation on the stock with our price target of HUF 29,412 per share.