Hungarian MOL Wins All Fourth Round Blocks

Hungary's ministry of national development announced the results of its fourth tender for oil and gas concession areas in Hungary and there was only one winner: state producer MOL.

The 2016 Bid Round offered 9 areas or blocks for hydrocarbon exploration, but only 6 blocks received bids. In total, there were 11 bids received for those 6 blocks and, as previously noted, these bids were submitted by only 3 companies, all of whom had participated in previous bid rounds.

The tender procedure in respect of the 3 blocks which received no bids was declared unsuccessful and it remains to be seen if they will re-tendered in the next bid round.

MOL has 60 days from December 5 – with an optional extension of an additional 60 days – in which to negotiate the concession agreements with the ministry and it is expected to sign its new concession agreements in early 2017.

As a result of MOL plc successfully winning all of its 6 submitted bids, there are some industry commentators who had been wondering why MOL had not been more aggressive in its earlier bids, and hence think that MOL has only now decided that it really wants to participate, whilst others suggest the other two bidders were perhaps less interested in the blocks on offer, having been successful in earlier rounds, and may have submitted less competitive bids. The truth, as always, is likely to lie somewhere in between, although given the costs and efforts involved in submitting bids, it does not make a great deal of commercial or fiscal sense only to participate to make up the numbers.

We now await details of the fifth bid round which is due to be launched in 2017.

 Round 4 results

Source: Govt 

Steven Conybeare is an English lawyer specialising in the upstream oil & gas industry, with offices in Budapest and London. His practice has a particular focus on central and eastern European markets.