BAKU, Azerbaijan, May 7
By Leman Zeynalova – Trend:
Hungarian MOL Group company has lowered the oil and gas production by four percent in the first quarter of 2020, Trend reports citing the company.
Due to the extremely low oil prices from the beginning of March, Upstream EBITDA (earnings before interest, taxes, depreciation, and amortization) decreased to $185 million in Q1.
Oil and gas production volumes were 110.6 mboepd, 4 percent lower than a year ago, due to the natural decline in the Central East Europe.
In Q1, MOL, as an operator, made an oil and gas discovery offshore Norway with a preliminary estimate of recoverable resources between 12-71 million barrels.
As for the downstream, clean CCS EBITDA doubled and increased to $295 million in Q1 from a low base, supported by doubling refinery margins.
The polyol project reached 60 percent completion at the end of Q1. The pandemic affects the project’s supply chain and makes workforce mobilization increasingly difficult. Its full impact on the project schedule is not yet possible to assess, but delays are expected.
Refineries were running at 70-75 percent, steam crackers at 90 percent capacity in April. Refinery margin was USD 9/bbl in April, but declined materially recently; petchem margin has been at EUR 500- 600/t since mid-March. All main logistics routes and systems are operational.
Large inventory and foreign exchange losses resulted in MOL reporting a $152 million net loss for Q1, the first sign of the pandemic-related crisis. Underlying operations were running strong until mid-March, as reflected by the $622 million Clean CCS EBITDA, however, the pandemic had already started to severely affect all business lines in the last 2-3 weeks of March and the situation further deteriorated in April. Due to the unpredictable external environment, 2020 EBITDA guidance was withdrawn and organic capital expenditure guidance was cut by more than 25 percent.
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