Annual Report 2015


Report 2015



Key achievements 2015

  • Delivered total production of 104 mboepd, equivalent to a 7% increase over 2014
  • Started systematic Production Optimization efforts in CEE with first visible results already in 2015. Successfully reversed onshore production decline in high-margin CEE with onshore oil production in Croatian up by 20% and in Hungary up by 5%
  • Achieved a 7.3 USD/boe direct production costs for 2015 implying that the vast majority of the portfolio has been profitable at low oil prices
  • Doubled the unrisked recoverable resource potential of MOL Group to 1.2bn boe with the entry to Norway
  • Removed residual risks from the portfolio

Outlook for 2016

  • Launched the New Upstream Program in order to deliver a self-funding business in a USD 35/bbl Brent price environment
  • Continue Production Optimization in CEE with all interventions break-evening at or below USD 20/bbl
  • Implement USD 80-100mn OPEX savings which will result in direct production cost at around USD 6-7/boe
  • Cut organic CAPEX to USD ~500-600mn in 2016 (~ -15-30% year-on-year). Cut Exploration CAPEX by ~50%; Norway, nearfield CEE and Pakistan to remain in focus
  • Spend development CAPEX in CEE only if projects are break-evening at 30 USD/bbl

Outlook for 2016-2018

  • Production to increase further to ~105-110 mboepd in 2016-17 and to ~110-115 mboepd in 2018


What have been the most important tasks for MOL Group Upstream recently?


The external environment has changed fundamentally with the sharp decline of oil prices by the end of 2015. Delivering value matters more than delivering barrels. In 2015, MOL has proven that even under these circumstances our portfolio can generate substantial value, largely due to our very competitive direct production cost of ~7 USD/bbl. Going forward, in 2016, we want to ensure that our business is self-funding at 35 USD/bbl. In order to achieve this, we have launched the New Upstream Program. Under the program umbrella we will continue our relentless production optimization efforts in CEE while simultaneously focusing much more on OPEX and CAPEX efficiency. MOL’s Upstream will be fit for the lower oil price environment!

Berislav Gašo – Chief Operating Officer, Group Exploration and Production