Gazprom ready buy Hungarian MOL's 49% stake in Croatian INA

The mass media has reported that Hungarian MOL sells its 49% stake in the Croatian oil company INA to Gazprom. INA works in exploration and production in Croatia and abroad - in Angola and Egypt. As of end of 2013, the company's reserves (2P) amounted to 251 million barrels of oil equivalent, while the production was estimated at 40.2 thousand barrels of oil equivalent per day.

As for the downstream segment, INA owns two refineries with the capacity of 4.5 million and 2.2 million tons of oil per year, with Nelson index equal to 5.8 and 6.1 respectively. INA also controls a network of 445 filling stations in Croatia, Bosnia and Herzegovina, Slovenia and Montenegro.

Corporate conflicts between MOL and INA have happened many times, and a sale at a good price would be beneficial to the Hungarian company, which would get rid of a problem asset. Last year was very difficult for MOL. Its net profit declined by 86%. At the same time, the processing segment in Europe has not the best time due to weak demand for oil products, while oil prices are high. As a result, European refineries operate under conditions of excess capacity and extremely low refining margins. In the second half of 2013, refining margin of European refineries decreased more than two times - from $3.2 per barrel (-3.2%) in the second quarter to $1.5 per barrel (-1.3%) in the third one In the first quarter of 2014, it fell to a four-year minimum of $0.9 per barrel (-0.8%).