Oil and gas company MOL has signed an authority contract with the Hungarian state that sets minimum levels of hydrocarbon extraction in Hungary for five categories between 2023 and 2024. As long as the company meets these levels, the extra mining fee is expected to be reduced by a maximum of 400-450 million dollars retroactively over the 16 months between September 2023 and December 2024.
Managing Director of MOL Group’s research and production unit, Zsombor Marton, said that the company is pleased that the Hungarian state had taken into account the producers’ concerns. As for their concerns, the increased level of the mining fee would not compensate for the investments in production that would improve Hungary’s security of oil and gas supply. The contract will allow MOL to make the investments necessary to maintain its production in Hungary, which is in the common interest not only of the signatories but of all domestic operators. In its statement, the Supervisory Authority for Regulated Activities stressed that the production of 2 billion cubic meters of natural gas in Hungary is within reach.
The regulator recalled that, in order to maintain the cuts in utility costs, the government is committed to increasing affordable domestic production. Under the Government’s decree, an official contract model will be in place from 1 September, whereby mining companies can commit to further investment and increased production in return for a more favorable and predictable banded system in the royalty payments.