MOL asked for Competition Regulatory Approval to purchase a Kazakh company holding oil exploration rights in Russia – according to business daily Napi Gazdasag. The newswire reported the targeted company Baitex has 60m barrels of proven crude oil reserve and exported 28 tons of crude oil in the first ten months of 2006. Press reports there are several other bidders interested in the 100% stake in Baitex, but did not name them.
Our view:
We see the news as neutral due to the probably large interest of other oil companies. We see the proven reserves of the targeted company could worth roughly US$ 200m, also depending on the pipeline connections and the investment required by the field. We see MOL could easily finance the acquisition, although we see there is a risk of MOL could overpay.