MOL Group, Hungary's largest oil and gas producer, has entered into a strategic partnership with Libya's National Oil Corporation (NOC). The memorandum of understanding, signed in Budapest, establishes a framework for the two entities to exchange information and jointly explore potential areas of cooperation.

Strategic Motivations for the Partnership

For MOL, this agreement is part of a crucial drive to diversify Hungary's oil supplies and imports, a major task following the European Union's prohibition on Russian energy imports. The company emphasizes that diversification is of crucial importance for the security of supply and energy sovereignty of landlocked countries. Concurrently, Libya is seeking to revive its oil production after years of turmoil, with output recently reaching its highest level in a decade.

Areas of Potential Cooperation

The outlined areas of cooperation are comprehensive, including hydrocarbon exploration and production, technological and field development innovations, oilfield services opportunities within Libya, and crude oil supply and trading activities. MOL's CEO stated the agreement will act as a catalyst for expanding the company's international portfolio.

Context of MOL's Broader Strategy

This Libyan agreement aligns with MOL's active strategy to strengthen its international portfolio through new partnerships and maintain a targeted strategic production level. Recent and ongoing activities include:

• A pending acquisition of a majority stake in Serbia's largest oil and gas producer, NIS, which holds significant reserves and production.
• Exploration and production cooperation agreements signed in the past year with national oil companies in Kazakhstan, Turkey, and Azerbaijan.
• Existing production assets across multiple countries, including Croatia, Azerbaijan, Iraqi Kurdistan, and Egypt.

Current Supply Situation

Despite the diversification push, Hungary continues to import Russian oil via the Druzhba pipeline under an EU exemption granted in 2022, which currently has no defined end date.