Hungary MOL confirms staying away from ZMB board meeting

Portfolio,hu

Wednesday, July 22, 2009 09:29:00 AM

Hungarian fuels group MOL has confirmed not participating in a board meeting called by the ZMB project company, where the parties - including MOL's 50% partner in ZMB, Russneft - would have tackled the issue of a new gas-fuelled power plant. MOL said it did not go to the BoD meeting as it has to be convened by the Chairman of the Board and it has not happened yet.

2009.07.21 15:41
Hungary MOL fails to turn up at ZMB BoD meeting to talk gas plant plans

MOL's three board members did not participate at a Board of Directors meeting called by the ZMB project company, leaving the meeting short of a necessary quorum to make decisions, MOL's communication director for Hungary Dóra Somlyai confirmed to Bloomberg a report by Russian daily Kommersant.

A board meeting must be convened by the president of the board and this has not happened so far, the news agency cited Somlyai as saying in an e-mail.

Some board members initiated the meeting but the president did not convene it, she added.

Kommersant reported on Monday that a ZMB board meeting would be held to decide on the possible building of an 800 ruble (USD 25.25 m), 16 MW gas-fired power plant that could serve as a solution to retain ZMB's crude production licence.

In the first week of July, Russia's environmental watchdog Rosprirodnadzor ruled that the MOL-Russneft joint venture fails to meet an obligation to utilize 95% of the so-called associated gas that is produced when extracting crude oil.

Russia's Federal Subsoil Agency, also known as Rosnedra, gave the companies a six- month to remedy this situation, threatening to revoke their production license, which is valid until 2016, if they fail to comply.

It is a more or less general view on the market that the tug of war at the ZMB field is but a show and it is the Russian state that is putting the heat on MOL. The reason is exceedingly simple. MOL gave a cold reception to its new large owner, Surgutneftegas, which acquired a 21.2% stake in MOL from Austria's OMV earlier this year. The welcome was so frosty that the Russian company is still not able to exercise its ownership rights in MOL.