Hungary buys back MOL stake from Russia's Surgut

Hungary has bought back a 21.2% stake held by Russia’s Surgutneftegaz in fuels group MOL. The deal, to be completed August 31st this year, is worth EUR 1.88 billion and will be paid for from previously drawn IMF grants.

The government acquired the package for EUR 1.88 billion, for which it tapped the funds granted by the International Monetary Fund (IMF) as part of a rescue package in the autumn of 2008. The cabinet supports MOL’s strategy and management.

Prime minister Viktor Orbán claims this move enhances eneregy security since one of the keys to success in the region is the reduction of its energy dependence and the revival of national industries.

Development Minister Tamás Fellegi told a press conference that negotiations between the Hungarian government and Surgut lasted several weeks. The state is buying back the entire MOL stake held by Surgut, he added.

Buying back this package constitutes the first step in the government’s plan to increase its share in strategically important sectors, he added.

This move stabilizes MOL’s situation and averts a major hindrance to further development of Russian-Hungarian relations, the minister said.

The EUR 1.88 m purchase price comes from the average price of MOL in the three months before the agreement was signed. The transaction needs to be completed by 31 August.

The Hungarian opposition parties MSZP (Socialists) and LMP (Politics Can Be Different) have stated that the price paid for the MOL stake was way too high, it was a mistake and in itself does not strengthen energy security since most of the oil and gas to Hungary still arrive from Russia.