Page 12 - Euroil Week 14 2020

EurOil PERFORMANCE EurOil
MOL withdraws 2020 EBITDA guidance
HUNGARY
MOL’s capex will be at least 25% lower than the original guidance.
HUNGARIAN oil and gas company MOL on April 8 said it is withdrawing its guidance for 2020 Ebitda because of uncertainty related to the pandemic and is planning to put profit into retained earnings.
The guidance is being withdrawn because of “the uncertainty related to the duration and impact of the coronavirus pandemic, the extreme volatility of the external environment and the unpredictability of volumes development across our businesses”, according to the statement.
MOL said 2020 capex will be at least 25% lower than the original guidance of $1.9bn-2.1bn - at below $1.5bn - because of the delay of non-es- sential investments and supply chain bottlenecks caused by lockdowns. MOL said it will soon complete a comprehensive review of operating costs to support cash preservation.
“All measures ultimately serve the purpose to preserve cash and allow for MOL to maintain cash neutrality, while our operations are running uninterrupted,” it added. Even after closing the acquisition of a stake in the Azeri-Chirag-Gu- nashli oil field in the Caspian Sea, MOL said it will continue to have ample liquidity with “around $2bn-2.5bn financial headroom in the form of cash and cash equivalents and undrawn credit facilities”. “This should allow MOL to successfully manage through these challenging
times,” it added.
The board is proposing placing all of last
year’s profit into retained earnings, in line with short-term efforts focusing on cash preservation and retaining maximum flexibility. “Once the situation normalises and circumstances allow for it, these retained earnings may be used for cash dividend distribution upon the decision of shareholders,” it added.
MOL paid HUF142 on 2019 earnings.
An ING energy analyst said the decision was a negative surprise as regional energy firms, PKN Orlen and OMW maintained their dividend payment. Steps taken by MOL aim to ensure that it can complete ongoing projects.
MOL is striving to become a leading player in the petrochemical segment the CEE region with plans to expand its value chain. Under the 2030 strategy, the company plans to invest around $4.5bn until the end of the next decade into pet- rochemical projects.
In related news, MOL has successful switched from producing windshield cleaner fluid to hand and surface sanitiser production at its Western Hungarian plant. MOL Lub plans to turn out 50,000 litres of sanitiser a day to hospitals and municipalities.
MOL gained 1.62% to HUF1,941 on the Budapest Stock Exchange on Wednesday.™
POLICY
Norway proposes smaller offering in next APA round
NORWAY
It is the smallest offering since 2015.
NORWAY has proposed including 36 new oil and gas blocks in its next offshore licensing round, its energy ministry said last week.
It is Norway’s annual Awards in Prede- fined Areas (APA), in which rights are offered to mature areas of the Norwegian Continental Shelf (NCS). The proposed offering, which will be considered in a public consultation, is consid- erably fewer blocks than in the 2019 APA round, when bids were invited for 90.
“In these challenge times it is important to plan for the future. Stable access to new acre- age for petroleum exploration is key in order to develop our most important industry further,” Norwegian Energy Minister Tina Bru said in a statement.
The acreage on offer is situated in the Nor- wegian Sea, and no additional blocks have been proposed in either the North or Barents seas.
Public consultation should run until May 11, 2020.
Norway’s previous APA contest led to the award of 69 licences to 28 oil and gas companies in January – a result authorities said was a “vote of confidence” in the country’s offshore sector.
While no new blocks were proposed in the Barents Sea, the energy ministry told Reuters that it would consider the inclusion of some in its 25th frontier licensing round, due to be announced later this year.
Frontier rounds offer acreage in less explored areas where investment is naturally riskier but can yield greater discoveries. The latest one has been held by environmental concerns, mainly in the Arctic.
Greenpeace, which wants Norway to halt all Arctic drilling, said Barents Sea blocks would not attract any interest.
“It clearly shows that there is little appetite from the industry for drilling in the Barents Sea, up in the sensitive Arctic,” said its Norwegian head, Frode Pleym. ™
P12
w w w . N E W S B A S E . c o m Week 14 09•April•2020