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Surgutneftegaz and MOL, another big deal fails

Hungarian authorities have declared they bought out a 21.2% stake in the national oil and gas holding MOL from Surgutneftegas for €1.88bn. The Russian company purchased this asset from Austria’s OMV for €1.4bn two years ago but failed to secure its place in MOL’s shareholder register. Despite the efforts of Vladimir Bogdanov’s team and political support by Vladimir Putin, the Hungarian government remained firm persistently refusing to recognize the deal as legitimate; even the law on protecting the national oil company from an unfriendly takeover was passed.

From the formal point of view, opponents of the deal had a purely legal argument – unwillingness of Surgutneftegas to disclose its structure of property. Unofficially it was clear that Budapest was not going to put up with uncoordinated investments from a politically unreliable country in the opinion of Hungarian authorities. This position finally crystallized after the win of the nationalist party of Viktor Orban who consequently became prime minister.

Whatever motivation of the Russian side was in the attempt to buy a stake in MOL (impeding Nabucco the Hungarian firm participates in, attempts to withdraw money far away from competing economic, political and administrative clans or just implementing a financial investment), the result confirms an unpleasant trend in Russian-European relations. Russian companies fail to make long-term alliances with EU firms; the gates of strategic investments are closed. On the background of global growth in capitalization and influence of rivals from former third world countries that compete both against Russia and the EU it is hard to call such line in Russian-EU relations rational.

By Stanislav Mitrakhovich, NESF leading expert

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