8 January, 2007

MOL Group significantly increases its crude reserves by securing a 100% stake in BaiTex LLC

MOL Group has placed a winning bid for the purchase of 100% of BaiTex LLC in Russia from Texas-based VF-NEFT Development LLC and RusOil LLC, following the receipt of the approval of the Federal Antimonopoly Service.

According to the reserve audit provided by DeGolyer and MacNaughton (as of December 31, 2005) BaiTex had 66.7 million barrels of proven and probable reserves of crude oil, i.e. more than 20% of the present reserves of MOL Group.

Zoltán Áldott, Executive Vice President, for Exploration and Production of MOL Group said: “The purchase of this company is an excellent fit with MOL Group’s upstream strategy in the Russian Federation. Relying on our past experience in handling Russian fields MOL Group’s main goal with BaiTex is to maximize its recoverable reserves in order to achieve a balanced, long-term production profile on the field”.

BaiTex LLC owns the license to the subsoil under the Baituganskoye oil producing field in the Volga-Ural region, one of Russia’s main oil producing provinces. The infrastructural provision of the area is good, the field has direct pipeline connection to the main Transneft pipeline system.

The present level of production is 1,800 bbl/day of crude with 26 API degree and low sulphur content. In order to maximize BaiTex’ recoverable reserves and achieve a balanced, long-term period of production, MOL Group will spend more than USD 200 million on field development in the next eight to nine years and increase the daily production to app. 14,000 bbl/day by 2014.

Sándor Fasimon, Managing Director of MOL Russ also added: “Following the closure of this transaction our newly established Russian subsidiary, MOL Russ will be coordinating three main projects of MOL Group in the Russian Federation: the ZMB oil field (operated in a 50-50% JV with RussNeft), the Surgut-7 exploration project and the newly purchased BaiTex LLC. Relying on our recent successes and the good cooperation with our local partners, we are also looking for new opportunities for further expansion in upstream.”

The purchase price shall remain confidential, however it reflects the fair market value of Russian oil producing assets with similar characteristics, maturity and development potential.