MOL CEO spoke to business daily Vilaggazdasag on strategic plans of the company. Mr Hernadi said MOL is looking mainly toward Russia for new potential sources of oil production, and is also seeking to expand its refining operations beyond the three countries (Hungary, Slovakia and Croatia) in which it currently refines oil. Mr. Hernadi specified Russia, the former republics of the Soviet Union, the Balkan region and Turkey, namely through the Tupras Corporation, as potential locations where MOL might add to its current refining capacity.
Our view: Although it is not really new that MOL aims to get its foothold in Turkey, however, it is still unclear for us how it would happen. Authorities are to decide on a new refinery in Ceyhan soon, which would make it completely unreasonable for MOL to build a new one. Moreover, Tupras is also not interested in that, focusing on the extension of its secondary processing units, which could enhance complexity. However, if Mr. Hernádi meant that MOL is in talks with Tupras owners or the company itself on a potential cooperation, the news could certainly capture market interest. Other elements of the interview are not really new and therefore we see neutral market reaction to the report.