The Emergence of a Cee-Regional Multinational - a Narrative of the Mol Group Plc.*

Zusammenfassung

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This article describes the transition of MOL, the Hungarian Oil and Gas Company, from a state-owned enterprise to a privately owned regional-multinational company and outlines its growth to become a leading player in the CEE region. It also illustrates how the company went through the internal restructuring process before and during its acquisition period. Over three distinct development phases it then emerged as a new species in the CEE, as a "regional multinational". The case also gives valuable strategic insights into the oil industry of the majority of CEE countries.

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Auszug

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The Emergence of a Cee-Regional Multinational - a Narrative of the Mol Group Plc.*

The oil companies in the CEE-region

During the socialist regime in the CEE countries1 governments strived to make their own refineries sovereign and the oil industry as a whole was considered a priority. This resulted in independent national oil companies that focused on the entire value chain and were far from meeting any efficiency benchmark when compared to their "western" counterparts. Firstly they were not able and secondly they did not have to. The regional oil industry was inefficient in design. None of the countries were connected via pipelines. The infrastructure had a hub-and-spoke design ensuring dependence on the former Soviet Union. Each country had separate deals with Moscow, the prices were not based on market drivers, but rather crude oil was the clearing currency between Moscow and the COMECOM countries. On the other hand fuel prices were controlled by the states and were kept artificially low before the price deregulations in the early 1990's.

Regardless of common past, the oil compames in CEE countries had different vertical integration structures. In some countries the oil companies were separate entities, while in others even the energy and gas sectors were integrated with the oil sector.

Throughout the years these countries had started transitions in different times due to various political or economical reasons and therefore their oil industry restructuring and privatizing was at different stages at a certain point in time. After the shifts to the market economy, many state owned later privatized oil companies have proved that they cannot stand on their own feet and be competitive in the international markets. A number of these companies were poorly managed that has led to high debts and obsolete technologies. They had two choices: either to attain financial resources to strengthen the domestic presence, restructure the companies and improve efficiency or do so with external help - through acquisition. This kind of environment laid grounds for a consolidation trend in the sector throughout the CEE region.

Privatization in some countries still has not finished since it is highly influenced by the political situa...

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