MOL Ups Output, Struggles Downstream
Hungarian energy firm MOL produced 6% more oil and gas in full year 2016 than in 2015, at 112,000 barrels of oil equivalent/day and enjoyed higher oil and spot gas prices than in the year-prior quarter.
But the downstream under-performed with refinery turnarounds and unscheduled maintenance cutting availability, it said February 28. Petrochemicals and retail did better, with high margins in both areas.
Full year 2016 net profits were $941mn, with overall current cost of supplies (CCS) pre-tax earnings (Ebitda) of $2.15bn, only slightly down on 2015.
Continuing on a CCS basis, its Q4 2016 upstream earnings before interest, tax, depreciation and amortisation (Ebitda) rose from forint 44mn ($152,000) in Q4 2015 to forint 55mn; but downstream fell from forint 106mn to forint 84mn; and midstream gas - essentially Mol's wholly-owned 5,782km Hungarian gas transmission system FGSZ -- fell from forint 19mn to forint 15mn. Overall CCS Ebitda fell 15% from forint 150mn to forint 140mn.
Most of the additional output came from low-cost oil in Russia; new production in the UK; and Croatian gas, although low prices in Croatia took the shine off. The UK accounted for half the company's 2016 development spending of $312.5mn, with first oil from Scolty and Crathes delivered in November. Croatia - where it is the largest shareholder in INA -- accounted for roughly another quarter.
Exploration capex was down by more than 70% in the year while operating costs/barrel were in the middle of the planned range of $6-$7/b and the operating cost cutting programme yielded savings of $90mn.
MOL platform in the Adriatic
(Credit: MOL)
Discussing full year 2016 results, MOL CEO Zsolt Hernadi said: "Upstream generated over $250mn free cash flow at the bottom of the cycle and achieved the highest central and east European onshore oil and gas production since 2012. Downstream posted robust results, only slightly behind the record-high 2015 levels, despite lower refinery and petrochemicals margins."
William Powell