MOL is planning to reduce investments and focus on assets closer to Hungary that can still generate cash after a plunge in oil prices and Croatia is on the radar as an investment possiblity.
MOL owns almost 48 percent of shares in the Croatian oil company INA and has expanded into Norway and the U.K. in the past two years.
“Our priorities for this year are focusing on what we have, extracting value from the assets,”said Berislav Gaso, the chief operating officer in charge of the exploration and production division. He added for an interview in Bloomberg that, “I like barrels but I like dollars even more and in a $30 environment it is all about dollars when you operate in upstream.”
MOL is the second-largest listed company by market value, and operates in 40 countries, is betting on lower spending as oil prices slumping to the lowest in more than a decade force industry players worldwide to rethink strategy to stay afloat. MOL will cut operating costs and will only invest in projects that can break even at an oil price of $30 a barrel, according to Gaso.
The company is intensifying production in Hungary and Croatia, which together account for close to 80 percent of the group’s overall output as “there’s still a lot of value to be extracted from these assets,” Gaso said.
As a result, production in Hungary rose in the last three months of 2015 from the previous quarter and Croatian onshore oil production rose on an annual basis, he said.