21.1 C
Belgrade
25/06/2024
Energy NewsUncategorized

Hungary oil&gas blocks tender 2015 , winners

The 2015 Bid Round made available a total of 9 hydrocarbon blocks for oil & gas exploration and production, and 1 for coal. On 25 November 2015, the Hungarian government announced the winners of the 2015 Bid Round.

The successful bidders were awarded the following oil & gas blocks, subject to the timely execution of the required concession contract:

Supported by

(1)   Battonya-Pusztaföldvár Észak and Dány: MOL – Hungary’s national oil & gas company (2 blocks);

(2)   Berettyóújfalu, Mogyoród, Nagykáta and Ócsa: O&GD Central Kft (OGD) – portfolio company of private equity investor Warburg Pincus (4 blocks);

(3)   Püspökladány: Panbridge Hungary Zrt. (Joint venture 85% Bankers Petroleum and 15% TDE); and

(4)   Lakócsa: Hungarian Horizon Energy Kft (HHE).

The following blocks were offered, but were not awarded: Sellye (Oil & Gas) and Dubicsány (Coal)

There was a significant increase in the number of bids submitted in the 2015 Bid Round, with a total of 17 bids made for 8 out of the 9 available oil & gas blocks: on average 2 bids per block.

Whilst we do not have specific details as to which blocks were sought by the 17 applications, there was clearly an improved level of interest across the board, and we understand there was more than one bidder on most, if not all, of the blocks. So this time there were a few disappointed participants.

At this stage, the basis on which the successful bidders won is not yet clear, but in due course it will become apparent if the competitive evaluation of bids resulted in favouring more money being offered (in terms of concession fees and/or royalties) or if the technical work program offered a better chance of exploration success.

We do not have details surrounding the two blocks which were not awarded (Sellye and/or Dubicsány): it may be that no bids were submitted, or that bids were made, but not accepted or otherwise failed to meet the required criteria.

Interestingly, there was one new entrant (Panbridge), which is a joint venture company between Bankers, whose principal asset is in Albania, and a Hungarian oil & gas company. Otherwise all of the other bidders have signed concession agreements previously, and are fully familiar with the legal, regulatory and fiscal environment in which they are required to operate.

The government rightly pointed out, in their announcement of the winners, that the 2015 Bid Round should be considered a success, particularly given the challenging investment climate for the oil & gas industry with the low oil price.

Although it is too early to say what may have contributed to this perceived success, it has to be, in part, due to the better quality of the blocks which were made available, and also because participants are now familiar with the terms and conditions which apply and therefore better placed to ensure their bids are successful.

naturalgaseurope.com

error: Content is protected !!