DOCUMENTS FOR THE ANNUAL GENERAL MEETING

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