Hungary: MOL decisive to close its Croatian Sisak refinery despite pressure from Cro Gov

22. October 2014. / SEE Energy News

Today, the Hungarian MOL welcomed the talks held between the Croatian president Ivo Josipovic and the stakeholders about the future of the Sisak Refinery, but MOL also repeated this refinery has been constantly operating at a loss since 2008 and that MOL’s experiences show that it is possible to convert refinery business operations incurring losses into a sustainable activity.

“MOL highly appreciates the efforts made by the president of the Republic of Croatia to initiate the talks with the stakeholders about the future of the Sisak Refinery”, it is said in the statement of Szabolcs I. Ferencz, Senior Vice-President for Corporate Affairs ofthe MOL Group and a member of Supervisory Board of Ina.

Office of the President of the Republic confirmedthat, on Monday, 13th October, a meeting was held at the President’s Office which, in addition to the members of the Staff ofDefense of the Sisak Oil Refinery,was also attended by the Croatian members of the Ina Management Board and the Chairman of the Board Zoltan Aldott, as well as the Minister of Economy Ivan Vrdoljak.

However, in his statement, the Senior Vice-President for Corporate Affairs of the MOL Groupcomments on some of the conclusions published in the Croatian media about the strategy, the deadlines for decisions and the responsibilities.

“The future of the Oil Refinery Sisak has been discussed for more than 15 years already. The cessation of the traditional activity, i.e. the oil processing in Sisak was proposed for the first time in 1998 by the management of Ina headed by Davor Štern”, Ferencz says in his written statement.

Thereat, he repeats that the Sisak Refinery has been constantly operating at a loss since 2008.

“MOL’s previous experiences show that refinery business operations incurring losses can be successfully converted into a sustainable activity. Such conversion can contribute positively to the further development of the uncompetitive sphereof business operationsinto a more modern and a more sustainable one, after determining a general framework. Such transformation, and the transfer of knowledge related to it (instead of the artificial maintenance of unsustainable structures) are exactly the role of a strategic partner and investor”, says the Senior Vice-President for Corporate Affairs of the MOL Groupand a member of the Supervisory Board of Ina.

As he stresses, the modernization of Rijeka into a first-class refineryis also envisaged by this transformation, should the stakeholders’ support be ensured.

“Several times during the shareholders’ negotiations, MOL tried to initiate talks about the business strategy and future of Ina, also including a dialog on the trends in industry andthe market reality. To this day, the Minister of Economyhas not shown any interest in a serious discussion about these issues”, Ferencz points out.

The representative of MOL also addsthat, in this company, they have heard about the recent request of the president of the Republic of Croatia who called for structural reforms in Croatia so as to suspend the administrative processes which had continuously led to financial losses and increased the country’s debt. “As a responsible shareholder, MOL will continue supporting Ina in the spirit of this request, considering that it is in conformity with the best commercial interests of Ina”, Ferencz concludes in his statement.

The Ministry: Strategic Decisions for Ina on the Basis of a Thorough Study

In today’s statement about the meeting between the President of the Republic Ivo Josipovic, the Croatian Minister of Economy Ivan Vrdoljak,as well as the Ina Board representatives and the trade unions that are active in this company, the Croatian Ministry of Economy has stated that, in this meeting, it was agreed that strategic decisions on the future of Ina would not be made without a thorough study, which would be analyzed critically and in detail among the main shareholders and also within the company.

The meeting was held on 13thOctober at the initiative of Ina’s trade unions and the defenders joinedtogether in the Staff of Defense of the Sisak Oil Refinery.

“The attitude of the Ministry of Economy is that the meeting at the Office of the president Josipovic showed the unified attitude of the institutions of the Republic of Croatia for the protection of national interests in accordance with the Croatian laws”, it is said in the statement.
In addition to the negotiations with MOL started a year ago,this has been one more way to achieve the protection of Croatian national interests in the energy company Ina,strategically important for Croatia, it is said in the statement of the Ministry of Economy.

“MOL entered Ina as a strategic partner, and not as a financial investor and acquirer. Therefore, the opinion of the Ministryof Economy is that MOL must also behave in this manner, not ignoring the fact of Ina’s strategic orientation as a vertically integrated, developed, regional company, and not as a subsidiary of MOL”, it is concluded in the statement of the Ministry of Economy.

The attitude of the Staff’s members, as it has been stated at the Office, was that the Refinery could survive, and the agreement was reached that strategic decisions on the future of Ina would not be made without a thorough study and a clear projection of Ina’s future.

In the last statement about the meeting at the President’s Office, the members of the Staff of Defense of the Sisak Oil Refinery expressed their optimism with regard to the fate of the Refinery.

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