DOCUMENTS FOR THE ANNUAL GENERAL MEETING
DOCUMENTS FOR THE ANNUAL GENERAL MEETING
DOCUMENTS FOR THE ANNUAL GENERAL MEETING
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MOL Plc. Annual General Meeting 2013 Documents<br />
OUTLOOK ON <strong>THE</strong> STRATEGIC HORIZON<br />
MOL was able to<br />
counterbalance the lack of<br />
Syrian revenues by showing<br />
its strength and diversified<br />
profile<br />
We are going to derisk our<br />
1.6 Bboe resource potential,<br />
including 725 MMboe from<br />
Kurdistan<br />
Beyond that, derisking our<br />
new core country<br />
Kazakhstan and mitigating a<br />
natural CEE production<br />
decline will be our main<br />
focus<br />
In Upstream, 170-180<br />
mboepd production is<br />
targeted by 2017-2020<br />
Our New Downstream<br />
Program is to deliver<br />
USD 500-550mn in efficiency<br />
improvements by 2014,<br />
compared to the 2011 base<br />
year<br />
In 2012, in line with previous years’ trends, around half of MOL<br />
Group’s earnings came from outside Hungary. We expect this<br />
tendency to continue in the coming years. The Upstream Division’s<br />
contribution has grown significantly over the last few years and<br />
delivered roughly ⅔ of Group EBITDA in 2012. However, our main<br />
success was that we were able to counterbalance the lack of Syrian<br />
revenues in the P&L to a significant extent which clearly shows the<br />
strength and diversified profile of our Group.<br />
In Upstream, the major task over the coming years will be to derisk<br />
our current 1.6 Bboe recoverable resource potential. The main focus<br />
will be on the Kurdistan Region of Iraq where we have already<br />
achieved three discoveries. As a result of our intensive exploration<br />
and appraisal programs, carried out together with our partners, we<br />
expect reserve bookings from Shaikan and Akri-Bijeel blocks in 2013<br />
and 2014, respectively. Moreover, the fast track development<br />
program in the Shaikan field will deliver the first visible barrels from<br />
the region which may not only stabilise Group-level production but<br />
support unit profitability as well.<br />
Beyond that, there will be more and more emphasis on our new core<br />
country, Kazakhstan, where we further increased our presence in<br />
2012. We have acknowledged recoverable resource potential of 135<br />
MMboe which is planned to be derisked in 2013 and 2014. Barrels<br />
from Kazakhstan should be one of the main pillars of our midterm<br />
production growth. In the CEE, our mission has remained<br />
unchanged; our aim is to mitigate the natural decline rate of below<br />
5% by maximising recovery rates and continuing exploration of<br />
remaining CEE upside.<br />
Due to previous years’ exploration successes, our hydrocarbon<br />
resource potential could well be a solid basis to reach our strategic<br />
target of a 100% reserve replacement ratio in 3 years, on average.<br />
We expect Group-level production to achieve 170-180 mboepd by<br />
2017-2020 with relatively stable unit profitability.<br />
In our Downstream business, the main focus remained on efficiency<br />
improvements, especially considering that a very challenging<br />
environment is also expected for the coming years. The New<br />
Downstream ProgramProgram was launched in 2012 and is now in<br />
full swing. USD 150mn in efficiency improvements were delivered in<br />
2012 compared to the 2011 base year. The goal for 2013 is to<br />
achieve a further USD 250mn in improvements while the ultimate<br />
goal is to deliver USD 500-550mn in cost savings and revenue<br />
increases compared to the base period. As part of the program, the<br />
entire value chain is being reviewed. However, the main focus on key<br />
cost elements aimed at significant operating cost reduction. Beyond<br />
that, management continues to evaluate all possible options for<br />
profitable operations of small, less efficient assets.<br />
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