CEO of Croatian oil company INA Zsolt Hernadi said in an interview to Hungarian media that Hungarian MOL will pursue its business strategy with or without INA and that Croatian Government should be a cooperative partner.
According to Hernadi, MOL is doing everything possible to achieve positive results in INA, but in order for this company to exist in the future, the cooperation with the Government is needed. He said that previous cabinets were willing to hold consultations with MOL only about the development concepts from 2003 and 2008, namely well before the crisis.
Hernadi stressed that MOL should discuss plans for 2030 with the Croatian Government in order that INA could still exist in 15 years. As long as the Hungarian company is unable to hold meaningful consultations with the Croatian Government regarding the future development of INA and as long as it is confronted with the planned economy mentality, there will be no progress in this field, Hernadi concluded, adding that INA may have a role in MOL’s growth path but it is not necessary.
As a reaction to this statement, Croatian Minister of Economy Tomislav Panenic invited MOL to talk about INA with the Croatian Government, about investments in INA and INA’s cooperation with the MOL Group. He said that INA still has not been integrated in the MOL Group and it can not be because MOL is the majority owner of the company and can not consolidate its results. Contrary to the announcements by the Hungarian side, nothing had been invested in INA and its distribution network had been reduced, Minister Panenic concluded.
Croatian Government and Hungarian MOL have long history of dispute regarding the managerial rights in oil company INA. In November 2013, MOL has initiated arbitration proceedings before the International Center for Settlement of Investment Disputes (ICSID) in Washington, due to breach of certain obligations and procedures related to MOL’s investments in Croatia. According to MOL, the Croatian Government has not met its obligations under the main contract on gas business and its annexes to which it has committed in early 2009. The state obliged that it will take over INA’s natural gas business and purchase the entire INA’s gas production at market prices in the next 15 years. MOL claims that because the Government failed to comply to its obligations, the company suffered over 270 million euros in damages.
In January 2014, the Croatian Government filed an arbitration claim against MOL to the United Nation’s Commission on International Trade Law (UNCCITRAL) in Geneve, which seeks to declare void the contract amendments from 2009 on management rights in INA and main contract on gas business.
MOL has 49.08 % of INA’s shares, while the Croatian state has 44.84 % stake in the company.
