Hungarian oil and gas group Mol aims to acquire five new exploration licenses and shares in additional three licenses on the North Sea via an agreement with a Norwegian oil company, said Lars Thorrud, Mol Norge CEO, in an interview with Hungarian state newswire MTI on Friday. This would further expand the group’s 14-strong sea portfolio.
Thorrud said that by acquiring one or more so-called "drill or drop" licences Mol would be able to conduct exploration projects in a given area for two years, and in case of a discovery it may carry out further drillings. The results of the tender are to be published in January 2016, he added.
The exclusively E&P-focused subsidiary estimates that North Sea stocks could reach at least 50 billion barrels, but the CEO stressed it is extremely hard to determine the potential of a whole region for new discoveries may be made any day.
Asked why the Norwegian market is so attractive to oil companies, Thorrud mentioned high-level regulation and transparency, including standardised contracts to make bureaucracy less cumbersome and that the state evaluates submitted tender applications based on quality only, rather than by the size or the nationality of the bidders.
Another advantage of the North Sea region is its tax regime. If an oil company fails to make an oil discovery, the Norwegian state reimburses 78% of the funds invested during the exploration phase within a year. If a commercial discovery is made and is brought to the surface, the company is obliged to pay 78% of its sales revenues to the state in form of a tax. Even though the profit potential is merely 22%, there are some 50 oil companies present on Norway’s market, which is double the number they had 20 years ago, Thorrud added. In his view, it is also promising that for the first time in many years the volume of crude oil production rose in Norway this year.
In July this year, Mol successfully closed the acquisition of Ithaca Petroleum Norge, which is now fully owned by Mol Group. The transaction is a major milestone towards Mol’s objective to become active in the Norwegian offshore fields.
Ithaca Petroleum Norge, which now operates as IPN Mol Norge, has a portfolio of 14 licences on the Norwegian Continental Shelf (NCS), out of which three are operated by IPN.
The deal doubled the size of Mol Group’s exploration portfolio, adding over 600 million barrels of oil-weighted net unrisked prospective resources.
Source: www.portfolio.hu
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