MOL Buys Oil, Gas Assets from BASF for $375M

FRANKFURT/BUDAPEST, Dec 13 (Reuters) – Hungary's MOL has agreed to pay BASF $375 million for some North Sea oil and gas projects, adding a new region to its upstream business.

As part of the transaction with BASF unit Wintershall, MOL will acquire 14 licences for exploration and production in the North Sea, mostly in the form of non-controlling stakes, plus interests in existing infrastructure assets, the two companies said on Friday.

While Mol said the deal would give it a "foothold in the attractive North Sea area", BASF wants to focus on offshore oil fields where it is not the junior partner.

"With the divestment of non-operated assets, we can concentrate on strengthening our competencies in exploration, field development and production activities on own-operated assets in the North Sea," the head of Wintershall, Rainer Seele, said.

MOL shares gained 1.9 percent by 0827 GMT, against a 0.8 percent rise for the wider Budapest market. BASF shares slipped 0.3 percent.

The deal was welcomed by Raiffeisen analyst Levente Blaho.

With the Hungarian company mainly sourcing fossil fuels from Eastern Europe, the Middle East and Russia, Blaho said the decision to invest in the politically stable North Sea area was a positive move. He also pointed to the offshore production expertise MOL would acquire.

The price, which MOL will fund from operating cashflow, is subject to adjustments at the closing of the transaction, which is expected in the first quarter of 2014.

The combined peak production of the assets is expected to reach 16,000 to 18,000 barrels per day in 2018, MOL added.

(Editing by Christoph Steitz and David Goodman)


Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.