MGP 2012–2014 Focus on efficiency improving PROGRAM DOWNSTREAM NEW and other key other and stakeholders governments Working with PUBLICPUBLIC AFFAIRS AFFAIRS & REGULATORY GROUP organisation our in people the among ownership of feeling astrong and pride We create STRATEGY STRATEGY RETAIL RETAIL MOL GROUP our assets in the most effi cient and our assets in the most effi cient and customers, while also operati ng all customers, while also operati ng all “The key“The thing is to acquire long- term, regular, loyal and sati sfi ed term, regular, loyal and sati sfi ed competi ve manner possible.”ti competi ve manner possible.”ti Horváth Horváth Ferenc

Think. Create. Move. Third Issue July2014 this issue: downstream contents

MOL GROUP ISSUE 03 July 2014

DOWNSTREAM› Interview 4 MOL GROUP DOWNSTREAM IN NUMBERS Ferenc Horváth Fascinati ng facts and fi gures about DS 6 Ferenc Horváth, EVP – Group Downstream, explains 5 WELCOME the new directi on of DS forcefully. To achieve our ambiti ous Zsolt Hernádi, C-CEO and Ferenc Horváth, EVP – REFINING goals just saying “adapt to change” is not enough… Group Downstream PETROCHEMICALS 6 FERENC HORVÁTH INTERVIEW LOGISTICS Change is the fuel of the future WHOLESALE 9 NEW DOWNSTREAM PROGRAM Focus on improving effi ciency 2012–2014 RETAIL 10 DOWNSTREAMING FUEL BUSINESS Product lines and supply process from the NON-FUEL BUSINESS refi nery to the various product markets 12 INSIDER Introducti on to the internati onal team of DS managers 16 GROUP NEWS Infographics Projects and developments worldwide Downstreaming 10 From refi nery to service stati on 18 E&P 200KBDOE PROGRAM A new beginning 19 OUTLOOK E&P world 20 PRODUCT KNOWLEDGE CENTRE Outlook of recently developed DS products 21 IN FOCUS MOL Group Retail strategy 22 IN FOCUS HR in Retail Network 24 FLAGSHIP NEWS SD & HSE Overview of local news and improvements Changing HSE 26 GROUP REGULATORY & PUBLIC AFFAIRS 28 Working with governments and other behaviour to create value key stakeholders Interview with József Molnár, Group CEO and Donna Darzentas, SVP – Group SD & HSE 28 HEALTH, SAFETY, ENVIRONMENT Everyone is responsible for HSE 30 CORPORATE RESPONSIBILITY & SPONSORSHIP What we are proud of 32 LEAN Implemented ideas 33 READERS’ FEEDBACK Your voice matt ers

34 BARREL PER DAY Guide to today’s trends and future developments

MOL Group Panorama – The Internal Magazine of MOL Group Published quarterly . Founder of Magazine: MOL Group Corporate Communicati ons . Executi ve Publisher: Dominic Köfner, Vice President - MOL Group Corporate Communicati ons. Magazine Manager: Aranka Kiss . Managing Editors: Anna Hőgyész, Árpád Lipcsei, Virág Váraljai . Contributors: MOL Group HQ Editorial Board, Flagship and Operati ng Company Representati ves . Publisher: HG Media – 1016 Budapest, Lisznyai u. 38. . Design: HG Media, Tamás Tárczy . Photos: Fotógyár English Editor: Jeremy Lovitt -Danks

July 2014 3 MOL Group Downstream in numbers welcome Region- wide DEAR MOL GROUP LOGISTICS, serve COLLEAGUES, wholesale the and retailNETWORK market AND MGP READERS, producti on F U E L

units This editi on focuses on MOL Group Downstream, one of the main pillars of MOL Group operati ons. with total capacity of 20.9 When the very successful fi ve years known as mtpa refi ning and 2.1 mtpa the “DS golden age” came to an end in 2009, petrochemicals, annually things changed, drasti cally, for the worse. The European downstream business came under severe pressure and is sti ll suff ering from adverse 6 global trends and an unhelpful governmental and regulatory environment. The key themes for DS today, therefore, are CHANGE – PROACTIVITY – LONG-TERM SUSTAINABILITY. A totally new approach is essenti al for the future – we need to keep shaking ourselves up, dusti ng ourselves down and embracing new ways of thinking. We fi rmly believe that MOL Group has the demonstrable 1,720 ability to concentrate on the customer in parallel with conti nuous effi ciency improvements in all MOL GROUP areas of Downstream operati ons. One of the main steps taken in this latt er 24% SERVICE STATIONS area was the New Downstream Program for 2012-2014. The program was proacti ve and motor fuel market ACROSS put in place at the right ti me. And now, a short list of our recent achievements – the sale- share in the CEE 11 COUNTRIES purchase agreement with Eni that increases our retail market presence in the Czech Republic, Slovakia and Romania, and our new petrochemicals operati ons, the Slovnaft LDPE-4 unit, the TVK butadiene extracti on unit and syntheti c rubber plant.

MGP appears four ti mes a year and, since Downstream operati ons cover a huge area, the next editi on in September will be dedicated to the Petrochemicals business.

We are very proud of the fact that our magazine 750,000fuel transacti ons per day has become a useful marketi ng tool. For example, the infographic “Way of Oil” has been petrochemicals plants mtpa refi ned products and translated into several languages and used on the spot locally while the magazine is also read by mtpa petrochemicals SALES 1.3 external stakeholders in every country in which to our wholesale customers MOL Group operates. Please keep on sending us your suggesti ons to MGP infoline: OF18 worldwide annually [email protected] 2 Enjoy a good read! New Downstream Program: effi ciency improvement USD100m+ already Ferenc Horváth Zsolt Hernádi USD400m delivered, benefi t sti ll to come in 2014 EVP – Group Downstream Chairman & CEO

4 MOL GROUP Panorama July 2014 5 interview interview

BUSINESS CARD

Executi ve Vice President – Change is the Group Downstream since 1 May, 2011. He joined MOL Plc in 1998 as Director - LPG fuel of the future Business Unit and worked from January 2001 onwards as Sales Director, responsible for the Ferenc Horváth, Executi ve Vice President sales of MOL’s enti re product range. Commercial Director – Group Downstream, explains the new between 2002 and 2003, his directi on of DS forcefully: “we all need a acti viti es broadened to embrace the purchase of the crude oil diff erent global, personal outlook to achieve and raw materials necessary for refi ning. He is a member of our ambiti ous goals. Just saying, adapt to the TVK and Slovnaft Boards change, is not enough. A more proacti ve of Directors, Chairman of the IES Board of Directors and has approach is necessary.” been a member of the INA Supervisory Board since 2012.

the FMCG (Fast-Moving Consumer Goods) business. Lars Höglund brought a totally ft er a 16-year career at MOL where we were performing well, albeit new customer-focused approach to the with the fi rst 10 years co- under diff erent circumstances; and identi fy company with the aim of achieving a real inciding with the golden age key acti ons to achieve maximum results step change to att ract new customers. of refi ning, how did you react under these bleak new conditi ons”. to a business environment that changed so What does this mean from the dramati cally for the worse aft er 2008? Well, you’ve been prett y successful so far. The key thing is to acquire long-term, management approach view point? When I joined MOL with a group of other Aft er all, the New Downstream Program regular, loyal and satisfied customers, Well, as I see it, it will be more pro-acti ve young people, rather like the ‘Young has delivered its fi rst very positi ve fi nancial than reacti ve thanks to the new manage- Turks’, we tried to change the Company, results. But you must have encountered while also operating all our assets in ment. There is more proacti vity in our parti cularly its atti tudes, mentality and some serious diffi culti es along the way. the most efficient and competitive recent projects, like Mantova, the Syntheti c culture. If I look back today, all my 16 years Identi fying the acti ons for improvement was rubber and LDPE-4 projects, and especially here have enjoyed conti nuous change not the most diffi cult part of the process, by manner possible. the deal with Eni. It is essenti ally diff erent and, of course, when I look around now, I a long way. It was the need for us to accept from past ones because Eni was an acquisi- realise I’m one of the ‘old brigade’. the fact that we all needed to look at every- ti on we achieved not in an invitati on-based Today, however, change has become very thing from a totally new perspecti ve. Firstly, naturally required new processes, so new public tender process. It was defi nitely the diff erent and much more dramati c. During I oft en used to hear my colleagues declaring teams were established and operati ons result of a deliberate, well-planned scheme. the so-called golden age, change primarily that we’d ‘always done things this way’ and transformed. Secondly, many new col- meant trying to adapt to quickly changing that ‘results were excellent’, that ‘between leagues were recruited with internati onal And what is the role and circumstances, very favourable circum- 2003-2008, MOL Downstream was one of experience. It was not just because they importance of the Eni project? stances back then. All we were doing was the most profi table businesses around’ and were from abroad that matt ered. What re- I don’t want to exaggerate, but this move is to strive for intensive expansion, removing that ‘everybody was so pleased with our ally matt ered was that we recruited experts of outstanding importance from a number all obstacles from our path. performance’. Then there was a sudden who had been through other, and diff erent of diff erent aspects. This is one of our largest But then crude oil prices rose sharply, change only 1.5-2 years later and we saw our challenges and could bring to MOL many acquisiti ons over the past few years. We driven by very unfavourable external condi- competi ti veness erode before our very eyes. and varied positi ve and negati ve experi- have just acquired 208 fi lling stati ons across ti ons. In 2011, we were forced to recognise It was very diffi cult to explain to our people ences which we could immediately learn three countries. We have always said that that this wasn’t just a transitory minor that we had done nothing wrong, but that from. It’s not enough just to keep our wherever we have a refi nery or a share in eff ect caused by the fi nancial crisis. This global circumstances were now totally dif- customers sati sfi ed today, we must retain the wholesale market, we would also wish to situati on required MOL Group to carefully ferent and against us. them as well. If we want to sell more motor capture a market positi on in the retail area analyse where we really needed to make fuel through the network, we must be able that could provide us with a stable marketi ng changes. As a result, we developed the How did the Glocal Project support the to att ract more and more customers by ap- opportunity along the enti re value chain. The New Downstream Program. We said “for- process of changing our whole approach? plying new, diff erent and exciti ng methods. key thing is to acquire long-term, regular, loyal get the past – revamp our enti re operati ng The two projects supported each other To meet new challenges, we’ve recently ap- and sati sfi ed customers, while also operat- portf olio; questi on everything, including excellently! Firstly, the new organisati on pointed a new Group-level Retail SVP from ing all our assets in the most effi cient and

6 MOL GROUP Panorama July 2014 7 interview solutions NEW DOWNSTREAM PROGRAM 2012–2014 MOL Group Downstream is success- MAIN GOAL IN NUMBERS ACTIONS TAKEN fully pursuing its New Downstream USD 500-550mn in EBITDA improvement • A review of the enti re DS value chain – Program, launched for the 2012–2014 by the end of 2014 radical changes period, to answer the challenges set • Over 300 effi ciency measures imple- by a depressed external environment. RESULTS IN NUMBERS mented to maximise revenues and • 2012 – USD 150mn, almost 30% of total minimise costs. A key element is the Key program objecti ves are to focus on target, delivered reducti on of energy costs improving effi ciency, to ensure more • 2013 – USD 250mn in additi onal inter- • The LEAN program is already running fl exible operati ons with rigorous cost nal effi ciency improvements in 3 producti on units and contributi ng management and to create revised • 2014 – USD 100mn+ benefi t sti ll due – strongly to the success of the integrated sales strategies. the target will be reached! New DS Program

competi ti ve manner possible. We are also We must maintain our competi ti veness bent on acquiring further retail opportuniti es NEXT DOWNSTREAM around the region. in our traditi onal product markets whilst meeti ng new demands for 2015–2017 How can MOL compete in light of internati onal trends and challenges products that will come from places PROGRAM from the likes of USA and China? other than refi neries. Let me refer to my favourite thought AIM AND TARGET from Charles Darwin, which goes like • Sustainably improve our Downstream acti viti es and Clean this: “It is not the strongest of the spe- shop, our managers had to conduct various CCS EBITDA by USD 300-400mn unti l 2017 compared to 2014 basis team exercises related to our culture, cies that survives, nor the most intel- ENERGY MANAGEMENT ligent that survives: It is the one that is values and behaviour. Aft er these events, SCOPE PRODUCTION FLEXIBILITY AND YIELD IMPROVEMENTS most adaptable to change.” Translated I’m very pleased that the whole organisa- • The program is an essenti al part of MOL Group DS 2015-2017 strategy REFINING to Downstream, this means that only the ti on has accepted and understood the and also serves as a tool for the implementati on of strategic goals MAINTENANCE & AVAILABILITY fi tt est, the most competi ti ve European challenges confronti ng us and is acti vely • NxDSP covers all elements of the integrated Downstream supply chain HYDROCARBON LOSS MANAGEMENT downstream companies can win by generati ng the changes we need to make. from Producti on through Supply&Sales to Retail, channeling the

PRODUCTION ORGANISATIONAL EFFICIENCY managing change most skilfully. The This is why we have started preparati on acti ons in 19 streams PETCHEM frequently used expression “adapt to for the Next Downstream Program sched- CRUDE PROCUREMENT change” doesn’t just mean to suff er and uled for 2015-2017. Work has, of course, live through change but to act more pro- begun, but the specifi c acti on plan will FEEDSTOCK PROCUREMENT

acti vely in order to be more adaptable only take shape by autumn. TOP-DOWN MINIMUM TARGET DIRECT SALES and successful in the changing business CRUDE COUNTRY CONCEPTS environment. Looking at the big picture, How can you help employees understand 300 OIL SUPPLY PETCHEM COMMERCIAL IMPROVEMENT we must say “fi rst change ourselves and the need for change and what it means to ADDITIONAL BUSINESS POTENTIALS (RESULT OF then drive changes in the environment each one, personally? CARD SALES BOTTOM-UP APPROACH) in which we operate”. We started this The LEAN program is a wonderful ex- WHOLESALE TRADE DEVELOPMENT process at the right ti me but there is sti ll ample of how we can achieve this since it LOGISTICS SUPPLY DEVELOPMENT

a long way to go and it will not just end helps to teach people about the need for SUPPLY & SALES when the New Downstream Program is change and how they personally can de- LOGISTICS COST EFFICIENCY LOGISTICS completed but will keep going on and on. velop ideas to achieve such change. Many 400 MAINTENANCE MANAGEMENT We held the Leadership Summit and the people are afraid of change because they Downstream Workshop in the fi rst week fear lower social security and unemploy- HC LOSS MANAGEMENT of June. At the Summit, we presented with ment in the future. I see exactly the op- million USD STRATEGIC PROJECTS ASSET OPT. AND NETWORK EFFICIENCY Alexander Dodds, EVP – Group E&P and we posite: to ensure jobs in 5-6 years’ ti me, • BUTADIENE PROJECT showed that we have a very common back- we must conti nuously change today so • LDPE-4 PROJECT DELIVER SOLID FUEL FLOW • MANTOVA CONVERSION RETAIL

0 RETAIL STEP CHANGE IN NON-FUEL ground to our vision, values and strategies. we may remain successful, employed and • M&A PROJECTS On the next day at the Downstream Work- happy in circumstances sti ll to come.

8 MOL GROUP Panorama July 2014 9 infographics infographics 4 LOGISTICS 7 In 2013, totally 23m tons of products were transported: PRODUCT MARKETS DOWNSTREAMING 20% through railway, 27% through road, 7% on barges and 46% via pipeline to and from 40 MOL Group terminals A.LPG – LIQUID PETROLEUM GAS and to 600 customer desti nati ons • MOL Group has signifi cant presence in 25 countries selling LPG to household, agricul- tural and industrial customers, as well as to MARGIN major distributors, with annual volume close COST 2 to 1m tons. Our retail network serves auto- PRODUCTION gas at more than 500 service stati ons B. FUEL 6 PRODUCTION UNITS IN 3 COUNTRIES: • MOL Group total fuel sales is 13.5m tons/year, • Danube Refi nery enough for 80 million people to fi ll up their tanks • Brati slava Refi nery more than 4 ti mes a year • Slovnaft Petrochemicals C. LUBRICANTS – LUB • Rijeka Refi nery • MOL Group is the market leader in lubricants • Sisak Refi nery in Croati a, Hungary and Slovakia. More than • Tisza Site 600 products are delivered by MOL-LUB and enough for 300 products by INA Maziva. Sales • An average of 3,200 various material of all MOL Group lubricants and autochemi- streams in 170 producti on units in all 3 cals amounted to over 77 kilotons in 2013 ~ a MOL Group refi neries are scheduled, SUPPLY CHAIN more than 20% increase which is equal to 1,600 producti on and MANAGEMENT D. BLACK PRODUCTS blending events per month • On average, 1,720 kilotons of MOL Group SUPPLY 1 Group SCM supports the ‘black’ products such as heavy fuel oils, bitu- whole Downstream process CRUDE PIPELINES C A P A C I T Y I N M T P A DID YOU KNOW? men, petcoke, base oils and waxes are sold by opti mizing and scheduling The Slovnaft LDPE-4 unit – to be completed annually in more than 30 countries F r i e n d s h i p ( S K p a r t ) 22.0 the producti on and distribu- by 2015 – will replace all 3 obsolete E.PETROCHEMICALS – PETCHEM F r i e n d s h i p I 3.5 ti on of all DS products F r i e n d s h i p I I 7.9 producti on units currently in operati on. TRADING ACTIVITY • 1.3m tons sold per year in 47 countries (from A d r i a ( H U p a r t ) 10.0 refi ned products from Mexico to China) to approx. 1,600 plasti cs A d r i a – J A N A F 20.0 third party supply manufacturers in 10 industrial sectors, from automoti ves to packaging DID YOU KNOW? The whole MOL Group product pipeline system is 1,840 km long, which is the distance from Budapest to Glasgow.

Austria

PL 15 46 Bosnia and Herzegovina CZ D SK 6 46 59 A LPG A RETAIL A More than 1700 service Croati a B stati ons with 8 brands in H B FUEL 11 countries and over I SLO RO C 4 bn litres sold per year 392 43 C LUB Czech Rep. HR BIH WHOLESALE & SRB D BLACK 5 INDUSTRIAL INTERNATIONAL RE-SELLERS 24 125 CUSTOMERS MNE

Hungary PRODUCT oil companies oil companies LINES END-USERS PETCHEM Domesti c and 365 core markets road transport MOL GROUP E PETCHEM companies agriculture Italy R e fi n e r y automoti ve SERVICE industry packaging STATIONS IN Petrochemicals Plant public transport industrial 198 THE REGION Port companies customers constructi on industrial & building & consumer goods Montenegro Romania Serbia Slovakia Slovenia Oil pipeline Petchem pipeline

1 151 39 212 33 6 Ethylene pipeline Product Depot

10 MOL GROUP Panorama All data are accordingnancial results. to the 2013 fi insider insider DOWNSTREAM MANAGEMENT

MOL Group Downstream has set out to align its operations with changing global trends and to serve its customers to even higher standards. Such targets would be impossible to achieve without the support of an LARS HÖGLUND overarching MOL FERENC HORVÁTH BÉLA KELEMEN MIIKA EEROLA DAVID PULLAN EVP – GROUP DOWNSTREAM SVP – GROUP DS SCM SVP – GROUP DS PRODUCTION SVP – GROUP RETAIL Group-level DS SVP – GROUP DS DEVELOPMENT strategy and the commitment of the whole Group Downstream management. 02

ÁBEL GALÁCZ MAURIZIO MIGLIAROTTI ARTUR THERNESZ GABRIEL SZABÓ ZSOLT PETHŐ SVP – GROUP SUPPLY & SALES CEO – IES DIRECTOR – INA REFINING & MARKETING DIRECTOR – SLOVNAFT DOWNSTREAM DIRECTOR – MOL DOWNSTREAM

hile the challenges these changes. Achieving a step change Group strives to signifi cantly increase the eff ecti veness of its processes. The roll- wherever possible. However, in all these posed by the diverse in the non-fuel business, creati ng and its trading and commercial acti viti es, out of the LEAN program to all our plants, transformati on and improvement projects, and constantly maintaining a relevant off ering to cus- including expansion of its presence in new the Mantova Refi nery transformati on the main contributi on undoubtedly comes changing external tomers with a constant focus on market markets. The successful achievement of project, the streamlining of Downstream from Downstream employees. The aim environment aff ect all trends and customer feedback is key to Group Downstream’s strategic goals is Development and the forthcoming Next of MOL Group Downstream therefore elements of the integrated Downstream establishing MOL as a power brand among underpinned by the organisati on’s speed Downstream Program all support the con- remains to involve and further develop its supply chain, MOL has adopted a strongly retail networks. It is also essenti al that, to market, which in turn depends on ti nuous improvement of our operati ons by individuals and teams by building a trans- proacti ve approach to eff ecti vely manage amidst the global refi ning crisis, MOL Group Downstream’s ability to increase creati ng added synergies and cooperati on parent competency matrix.

12 MOL GROUP Panorama July 2014 13 insider insider

BÉLA KELEMEN DAVID PULLAN MAURIZIO GABRIEL SZABÓ In light of the current To be able to adapt MIGLIAROTTI The key driver European Downstream to the fast changing In 2013, a huge trans- for success is our situati on, the role environment we need formati on project human resource of opti misati on has to change constantly. started in Italy with capital. Therefore at never been as impor- We are merging the the aim of securing the Slovnaft, with strong tant as it is now. We local Refining and DS long-term sustainabil- support from HR, are therefore focusing more on yield Development organisations to create a trust safety ity of our Downstream Business at IES. we have just launched a leadership improvement and margin increase new organisation that will have all the We are converti ng the Mantova Refi nery program called “IMPULZ” which is by minimising or even eliminati ng necessary technical skills to support into a logisti cs and commercial hub; the dedicated to 150 managers who are low-value black producti on. Although the operation and development of our acti viti es involved are proceeding to now being trained in how to build I am sponsoring the LEAN program in plants. We are also involved in chang- the planned ti metable. The process is trust, how to communicate and how Downstream and the SCM organisati on ing our work processes. Under the new at country level, so we have started the change should be managed effec- is deeply touched by this philosophy, the Project Management Guideline, a new integrati on of our subsidiaries, identi fy- tively. LEAN implementation at the offi cial LEAN wave will only reach our process called “Stage-Gate” has been innov ation ing all potenti al synergies to be exploited Slovnaft Refinery is in its 6th wave operati ons during 2014 and 2015. We defined, which will be the consistently and aligning all processes to create a at present. More than 100 Naviga- have to understand that LEAN is about used process to develop and execute new IES organisati on. While developing tors and Local Champions have been conti nuous improvement, building up a projects more efficiently and help us our commercial strategy, we are focusing trained and a total of 800+ employ- culture where everybody strives to do a to improve our CAPEX utilisation by on customer portf olio diversifi cati on and ees have been involved in producing bett er job, challenging their own work to standardising the work process and switching from a “distributor-oriented” more than 300 improvement ideas so see whether it creates true added-value clearly defining roles and responsibili- model to an “end-user-oriented” one. far. Nowadays, we fully understand for customers. Customer focus, or more ties. In addition, we have launched a We would like to miti gate the impact of and appreciate the benefits of the precisely the “voice of the customer”, structured work program that involves DOWNS TREAM this radical change on our employees so LEAN project. It is a strong tool in our is the core of LEAN and must be at the colleagues from many other organisa- we have implemented the Social Plan hands which helps us to be more ef- heart of our ever-changing operati ons as tions and the completion of 22 internal agreed with stakeholders, which strongly fective, to seize the initiative and be well. There is no magic to all this – sim- and external studies to identify new, VAL UES supports all our people. much more systematic. ply listen to customers and deliver what strategic projects to improve the profit- they want, no more and no less. ability of our plants.

quality e c i e n c y ARTUR THERNESZ ZSOLT PETHŐ Big time revamp of MOL Downstream MIIKA EEROLA LARS HÖGLUND our operations and aims to become We sti ll need to We are on the cusp of assets is moving for- best-in-class in the improve our safety embarking on a very ward. Our new opera- region and among leadership and also exciti ng journey in retail tional mode yielded the top 25% in systemati cally improve and are currently work- dive rsity financial improve- Europe. These our process safety ing on some important ments, safety performance is now in targets will only be achievable status. As regards ef- changes to Retail the European range, utilisation of our through continuous efficiency im- fi ciency, we need to improve in Solomon Strategy Directi ons in line with the new production assets is market driven and provements and quick adaptation to benchmarking results by 2018, especially Group Downstream Strategy. Primarily, we we are intensively playing on the sup- change. The LEAN program, there- in the key areas of reliability and energy are aiming for a step change in our non-fuel ply mix of diverse crude grades, block fore, has been extended to reach effi ciency. To achieve this, our roadmap business while delivering solid fuel growth operation and on-demand processing. not only our Tisza Site and Logistics has been drawn up and its core areas will by leveraging our current assets and We improved white product yields, but also Functional Units such as be incorporated in the Next Downstream increasing our market presence through motor fuel sales and increased market Procurement. In Retail, our goal is Program as well. In order to improve acquisiti ons. As far as the retail business ÁBEL GALÁCZ due to the desperate refining environ- share in Croatia, Bosnia and Slovenia. to be first-choice among consumers, reliability and have fewer unplanned is concerned, the key challenge is to know We have created ment reinforces the need for much Yet the journey into the green zone while operating the widest events in future, we are changing the site who our customers are and what they a growth-oriented more active product trading. As an needs restructuring of our assets and and most efficient network organisati ons and striving for more eff ec- want. We need to keep step with the latest sales strategy for example, while converting the shaping the technology to ensure in Hungary. In 2014, we have ti ve collaborati on with functi onal units. market and customer trends, to transform the next three years. Mantova facility, we intend to main- competitive and profitable refineries. launched more than 300 separate To achieve a systemati c and homogenous our fi lling stati ons into service stati ons and We have realigned tain a significant sales position in By modernising more than 160 service action programs to enhance em- approach among this large group of our pump att endants into hosts, and to our sales concept in Northern Italy, fully supplied by third- stations with new visual elements ployee engagement. 90% of these people working in Producti on, we are serve our customers bett er and more fully every country towards growth – be party resources. This transformation combined with high-quality motor actions have already started or using LEAN methodology to really change than our competi tors can ever do. A rel- that volume or margins. Additionally, project illustrates our new approach fuels, we elevated INA’s brand image been carried out, because we know daily operati ons across all our sites. We evant customer off ering must therefore be we have identified new markets like to supply and sales: moving away from and created a new value proposition. that the achievement of our ambi- are also focusing on blue-collar training defi ned at all our selling points, including Bulgaria where we aim to establish being a distributor of own production With these initiatives, we formed a tious strategic goals can only be and in parti cular on training for panel convenience stores, car washes, restau- s a l e s p o s i t i o n s i n t h e n e x t f e w y e a r s . towards becoming a fully-fledged market- driven and hardworking founded on the commitment and operators with our simulator trainings. rants and associated service providers. A decline in our own fuel production commercial and trading operation. organisation to be rightly proud of. expertise of our colleagues.

14 MOL GROUP Panorama July 2014 15 group news group news

MOL AGM – HUF 60BN DIVIDEND News in brief DR. ANWAR AL-KHARUSI PAYMENT, NEW MEMBERS OF has a Ph.D. in Petroleum SIGNIFICANT OIL DISCOVERY EUROPIA ASSOCIATION RENEWED Engineering from the The main associati on representi ng the THE BOARD OF DIRECTORS University of London. He has IN GHAURI BLOCK, PAKISTAN interests of the European petroleum At the Annual General Meeti ng of MOL Plc., shareholders approved 20 years’ oil and gas industry Ghauri Joint Venture (GJV) has made a signifi cant oil discovery in refi ning industry, formerly known as the Board of Directors’ fi nancial report for the year 2013 and, in experience and has worked the Ghauri X-1 well in the Punjab Province of Pakistan. The Ghauri Europia, has decided to refresh its at Petroleum Development additi on, approved the consolidated fi nancial statements. The AGM identi ty and from 1 June 2014 became in Oman, Shell Internati onal Explorati on & well discovery is a landmark achievement as the fi rst hydrocarbon accepted the Board’s proposal for a HUF 60bn dividend payment, FuelsEurope. The name change coincided Producti on in the Netherlands and Knowledge discovery made in the Eastern part of the Potwar Plateau. as well as re-electi ng Dr. Sándor Csányi and electi ng Dr. Anwar with the 2014 European electi ons and M Reservoir in the United Kingdom. Dr. al-Kharusi Alexander Dodds, EVP - Group E&P, highlighted: “MOL Group marked the 25th anniversary of the al-Kharusi, Dr. János Martonyi and Dr. Anthony Radev members has been working in various positi ons at the is committ ed to increasing investment in Pakistan, especially in S associati on. The new name was chosen of the Board of Directors. Aft er the Annual General Meeti ng, Zsolt Oman Oil Company since 2009, recently as view of the investor-friendly policies of His Excellency the Prime to bett er refl ect the associati on’s main Hernádi, MOL Group Chairman & CEO, summarised: “As expected, Head of Mergers & Acquisiti ons - Upstream Minister, Mian Nawaz Sharif and his Minister of Petroleum & 2013 turned out to be a challenging year. However, we succeeded in Internati onal. He is a citi zen of Oman. mandate which remains the conti nued Natural Resources, HE Khaqan Abbasi.” development of advocacy for 100 maintaining MOL Group’s excellent cash-fl ow generati ng ability, thus European refi neries through eff ecti ve DR. ANTHONY RADEV expanding our fi nancial headroom even further. This is a solid basis contributi on to policy debate at European was a Director of McKinsey & for MOL Group’s organic and inorganic growth projects. In 2013, we and Member State levels. built the foundati ons for a sustainable and decisive internati onal Company for over 22 years. Joining the fi rm in 1991 in growth strategy for MOL Group.” Germany, he was one of the GROWWW TEAM TASK COMPETITION founding partners of the The Group Growww Team Task DR. JÁNOS MARTONYI gained PhD in Law and Politi cal Sciences in 1979, and went on Eastern European offi ce in Competi ti on (TCC) event, which concludes to become a politi cian, legal expert, diplomat, lawyer and university professor. Between 1993. He personally opened up McKinsey offi ces MOL Group’s Growww 2013 program, 1984 and 1994, he held various positi ons in the Ministry of Foreign Trade and the Ministry in Budapest (1995), Zagreb (2003), Sofi a (2005) took place on 12 June in Százhalombatt a. of Trade, then served as Administrati ve State Secretary in the Ministry for Internati onal and Bucharest (2008). He also led McKinsey’s The competi ti on consti tutes a mandatory Economic Relati ons and at the Ministry of Foreign Aff airs. Between 1994 and 1998, Financial Insti tuti ons Practi ce in Eastern Europe. part of the Business Educati on Program, then from 2002 unti l 2009, he was a managing partner at law fi rm Baker & McKenzie’s Whilst with McKinsey, Dr. Radev completed a as the best Growwwer teams are required local offi ce. He served as Foreign Minister of Hungary during the fi rst and second Orbán vast number of projects in almost all sectors to present a topic or problem from governments (1998–2002, 2010–2014). Since 1987, he has lectured at several universiti es. of the economy and the public sector – from their areas of experti se with proposed fi nancial insti tuti ons through service industries soluti ons before a jury. The best three to manufacturing industries. He is a citi zen of teams selected were from MOL Pakistan Hungary, Germany and Bulgaria. (2 teams) and MOL Group HQ (1 team).

GLOBSEC CONFERENCE 2014 GCC: MOL GROUP ON THE MOVE Szabolcs I. Ferencz, Senior Vice President – MOL Group Corporate During Stage 1 of this 100-day Aff airs, met Minister Falah Mustafa Bakir, Head of the Kurdistan competi ti on, MOL Group teams took Regional Government’s Foreign Relati ons Department on 264,193,514 steps combined, which 15 May, 2014. The meeti ng took place at the Global Security (GLOBSEC) equates to walking around the world Forum, Brati slava, a unique foreign policy and security platf orm 4.22 ti mes. Based on distance travelled, supported by MOL Group, thus giving a Central European twist to the most acti ve MOL Group teams are A2M (Slovnaft ), SMT United (MOL Group the strategic debate on transatlanti c foreign policy, economics and G HQ) and SK’s Champions! (MOL Pakistan). security. Mr. Ferencz and Mr. Bakir discussed Iraqi politi cal and foreign The fi nal top three MOL Group teams will aff airs developments, including the recent parliamentary electi ons. be selected aft er the 100-day challenge Mr. Ferencz assured the government offi cial of MOL Group’s long-term is over, in September 2014, so there is commitment to investi ng in Kurdistan. Mr. Ferencz later joined the sti ll ti me to improve your scores and delegati on of Hungary’s Ministry of Foreign Aff airs, led by Minister performance. In additi on, based on the János Martonyi, to discuss bilateral Hungarian-Kurdistan issues such as votes from Global Corporate Challenge the upcoming opening of the Hungarian Consulate General in Erbil. parti cipants from all over the world, GCC’s Best Team Photo 2014 Competi ti on MOL GROUP ACQUIRES 208 FILLING was won by the MOL Group team ‘Vegyesvágott ’ from TVK. STATIONS IN THREE CEE COUNTRIES MOL Group has signed a sale-purchase agreement with Eni for its downstream NEW ASSETS IN THE CENTRAL NORTH SEA businesses in the Czech Republic, Slovakia and Romania, including its Agip-branded In line with MOL Group’s active portfolio development strategy, a Sale and retail network. This step contributes greatly to Group’s Downstream strategy FRESHHH2014 Purchase Agreement has been signed of increasing retail market presence, country coverage and customer base. The with Premier Oil UK Limited (“Premier”) LIVE FINAL acquisiti on of Eni’s wholesale business in these countries is also part of the The Serbian “Amcord” team won Freshhh 2014, to acquire shareholding interest in agreement. In the Czech Republic, 125 new service stati ons have been acquired, Central North Sea offshore assets in MOL Group’s internati onal oil and gas student Min Slovakia, 41 service stati ons will further improve Slovnaft ´s average throughput, 6 licences. The transaction contains competi ti on. Winning team members were Uros while in Romania, 42 newly-acquired service stati ons will be fully integrated. Lars certain assets of Premier Oil UK Limited, Denić, Faculty Of Civil Engineering, Belgrade, Höglund, Senior Vice President - MOL Group Retail, highlighted: “This acquisiti on is including a balanced mix of existing Sveti slav Mijatović, Faculty of Physics, Belgrade, a milestone in our CEE retail growth strategy. MOL Group now becomes the second and new production, as well as both Fand Dušan Ilić, Faculty of Economics, Belgrade. largest retail player, in terms of network share, in the Czech marketplace. The Group operated and non-operated exploration The Hungarian team from the Budapest University has signifi cantly increased its retail coverage in Romania and has taken a giant step to opportunities in the Scott-Telford and Rochelle Area for a consideration of Technology & Economics achieved second further enhance Slovnaft ’s brand image in Slovakia.” place, while the Polish team from the Warsaw amounting to USD 130mn. University of Technology came third.

16 MOL GROUP Panorama July 2014 17 in review outlook A NEW BEGINNING As the E&P 200KBDOE Program entered its E&P WORLD Implementati on Phase, an implementati on Kick-off Event was held in Visegrád on 19 and IN LINE WITH ITS STRATEGY, MOL GROUP EXPLORATION & PRODUCTION 20 May to start the handover of tools and IS MOVING FORWARD TO DRIVE PRODUCTION GROWTH, CENTRALISING templates designed by the Program team. ITS OPERATIONS AND INCREASING HSE AWARENESS.

MOL ENERGY UK OPENS THE 200KBDOE PROGRAM IS A CORE VEHICLE IN DELIVERING E&P’S FIVE STRATEGIC IMPERATIVES ABERDEEN OFFICE On 3 March, MOL Energy UK Become the ‘Best of the Rest’ delivering outstanding Environmental, Safety, Operati onal opened its Aberdeen offi ce with E&P Vision and Financial results with a fully developed workforce working as a team. 3 people on board. Since then, it has grown to 9 with the aim of increasing staff to 17 by the end of the Prioriti se People Development Zero HSE incidents/accidents Bottom-Up and Team Work year. The offi ce is responsible for managing 1 the assets acquired from Wintershall and Strategy 200 kbdoe in the shortest possible ti meframe identi fying further acquisiti ons in off shore Improve E&P business processes, build UK, ranging from undrilled explorati on an organisati on that is understood by all through to mature producti on. Its key 2 10-15% producti on Outcomes growth annually assets are: Catcher – a major UK project Operating of the Develop and communicate (internally which has just received Government E&P 200 and externally) the E&P growth story Model KBDOE +100% reserves approval; Cladhan, a subsea development Program 3 replacement due to produce fi rst oil in early 2015; and Rati onalise Upstream planning and Scolty/Crathes, which MOL Group aims decision-making processes Flat to declining Unit OPEX to sancti on later this year. Although only Planning & 4 a few months old, the offi ce is already Project Signifi cantly improve Project Planning, 100% eff ecti ve and effi cient enjoying a high profi le in Aberdeen aft er a THE FIRST E&P EVP SD & HSE AWARD GOES TO… Executi on, Implementati on, Delivery Management annual CAPEX delivery successful PR launch to business and the This year, MOL Group Explorati on & Producti on 5 and CAPEX spend press in May and a key speech at the Leadership introduced the EVP SD & HSE Award to Oil & Gas industry conference in June. recognize the best E&P company and contractor team, or individual, for outstanding SD & HSE per- s the E&P 200KBDOE is to implement and push these changes ‘How can I best support the business?’ For formance and providing valuable ideas and solu- Program entered its through.” The two-day event was hosted the Business Units however, it is imperati ve ti ons at MOL. This year’s winners are MOL Pakistan, Implementati on Phase, an by Alexander Dodds, EVP - Group E&P and to ask ‘How can I uti lise the Functi onal Units for its overall SD & HSE performance and Rotary implementati on Kick-off Program Sponsor, who highlighted that “The in the most effi cient and eff ecti ve way?’ MOL GROUP OPENS Drilling for best contractor HSE Performance. In additi on, Kalegran, Event was held in Visegrád on 19 and 20 ti me for doubts and questi ons has passed. As a next step in implementi ng the Program, REGIONAL OFFICE IN ERBIL BaiTex and Tamás Székely Szabó, Head of Well Operati ons at MOL, May to start transiti on from the Program’s There is no Plan ’B’, we either succeed with all Operati ng Companies are nominati ng In June, MOL Group opened were also awarded with Certi fi cates of Recogniti on for their outstand- Detailed Design Phase and to lay the the Program or MOL Upstream will not local transiti on managers and identi fying its new regional offi ce in Erbil, ing achievements in the fi eld of SD & HSE. The awards were presented groundwork for MOL to take longer-term in the Kurdistan Region of on 4 June at the MOL Group Leadership Summit in Siófok by József ownership of the Program’s outcomes. Iraq, which will be responsible Molnár – Group CEO, Alexander Dodds, EVP - Group E&P and Ahmad Nearly ninety parti cipants att ended the for controlling operati ons Ishti aq, Group E&P SD & HSE Manager. event, with each OpCo represented by There is no Plan ’B’, we either succeed with in the Middle East and its respecti ve senior management team, Africa, benefi ti ng from the local experience of the together with the Group E&P Leadership the Program or MOL Upstream will not survive. management. The implementati on and executi on Team and senior representati ves from of all regional business plans will be conducted Group Functi onal Units. The workshop by Dr. Majdi Ahmad, Regional Director – Middle was att ended by József Molnár, Group East & Africa, and the Erbil offi ce will gradually CEO, who emphasised that “MOL Group survive. E&P 200KBDOE is now about their local delivery teams who will set up expand in the coming months. The new, centralised Leadership recognises and supports the implementi ng the Bott om-Up Strategy local Project Management Offi ces (PMO). organisati on allows MOL Group to rati onalise need to change in the E&P business. by applying the new E&P Operati ng This ensures that stakeholder maps and Upstream planning and decision-making processes We all need to step outside our comfort Model, as well as using the new Project implementati on plans are all developed and in line with its E&P strategy, while the move also zone to secure a sustainable future. Management tools and principles for acti vely managed locally. For more eff ecti ve recognises the politi cal stability of a democrati c As leaders, we need to be willing to effi cient CAPEX uti lisati on.” change management, local town hall meet- Kurdistan Region and is a signifi cant commitment by do and learn diff erent things if we According to Mr Dodds, for the Functi onal ings and workshops are held in the OpCos MOL Group to a long-term presence in the area. want to succeed. The role of the leader Units, the main questi on should always be and started in June 2014.

18 MOL GROUP Panorama July 2014 19 developments in focus PRODUCT MOL GROUP KNOWLEDGE CENTRE RETAIL STRATEGY With a focus on customer expectati ons, the Product Knowledge Centre’s core mission With MOL Group Retail pursuing new strategic directi ons with a view to expanding both its fuel is to ensure the conti nuing competi ti veness of current and future DS products so as to and non-fuel businesses, it is imperati ve that we defi ne a more relevant customer off ering, while deliver the highest possible profi ts to MOL Group. calling on and developing the experti se of our people to ensure successful implementati on.

or our brands to become non-fuel. Our targets of selling 50% own s people are one of the Power Brand in our core producti on and doubling our non-fuel the key pillars of MOL markets, we need to become business in the coming years depends Group Retail strategy, HR IN LINE WITH EUROPEAN András Holló, the obvious choice for our on the expansion of our sales network, closely collaborates and DIRECTIVES Manager – customers internati onally both for fuel facilitated by a robust supply chain and our supports the Retail team Since the second half of the last MOL Product decade, MOL Group has started Knowledge Centre and convenience retailing. To put this ability to implement swift integrati on. in delivering its goals. To ensure this to produce bio-ethanol and vision into practi ce, MOL Group Retail Secondly, in order to maintain a more happens, we are focusing on building up bio-diesel containing, practi cally must be fully committ ed to providing complete customer off ering and create a the necessary skills and competencies, sulphur-free fuels in line with relevant, 360-degree customer service at service culture built on partnership and on providing the right development nati onal and EU legislati on. all points of sale. As with any relati onship, loyalty, we need to develop closer acti viti es and on creati ng att racti ve delivering the ulti mate customer off ering relati onships with our customers and moti vati on schemes for will require us to fi rst develop much get to know them bett er. the workforce. richer knowledge and understanding of This insight will enable MOL Group the customer. On this basis, we must then Retail to take a proacti ve approach make the right promises and create high and develop an integrated expectati ons to dynamically improve the response to the rapidly percepti on of our brand. changing demands of the This reordering of prioriti es will not market. We believe this only help us maximise returns for our can be best achieved shareholders, but also contribute to through a framework the comprehensive customer experi- of standardised ence that underpins MOL Group’s processes and reputati on for high quality, partnership, conti nuous effi ciency, innovati on and safety at improvement. all its service stati ons. Achieving these goals will MARKET DRIVEN ALTERNATIVE FUELS, BIOFUELS be impossible without MOL Group promotes the development and use of DEVELOPMENT having the right In MOL, TVK and MOL-LUB, our alternati ve feedstock and advanced and waste-based To add lasti ng value people on board. colleagues develop new products biofuels to further reduce greenhouse gas for our customers, we To add lasti ng value based on the requirements of the emissions from its fuels in a profi table way. To add lasti ng value market, meeti ng all current and need to create pride for our customers, we future legislati ve demands and need to create pride taking into account corporate social and a strong feeling and a strong feeling of responsibility so as to maximise of ownership among ownership among the product profi tability. people in our organisati on. the people in our It is imperati ve that we organisati on. develop the skills and positi ve atti tudes of our MAIN TASKS NEW PRODUCTS AND FORMULAE The MOL Group-level strategy we have people and opti mise the • Product quality forecasti ng, benchmarking • Premium grade EVO NEO fuels devised to achieve this rests upon four retail organisati on’s setup

• Product research and development • Agro and Truck diesels stable pillars. Over the next few years, the by establishing a competency LANA FAUST GROUP HR • Product portf olio management, troubleshooti ng • Speciality chemicals and test fuels same business plan will be simultaneously framework for the professional DOWNSTREAM • Applicati on technique tests for both Upstream • Road bitumens, base oils with improved quality implemented in our retail networks. and personal advancement MANAGER and Downstream • MOL Dynamic motor oils, new premium Our primary focus must be to quite simply of our staff . • Internal and external talent management lubricants and automoti ve chemicals off er highly relevant products and services LARS HÖGLUND • Advocacy (EU, Hungary) • Specialty PE and PP products at our points of sale, both in fuel and SVP - GROUP RETAIL

20 MOL GROUP Panorama July 2014 21 in focus in focus BUILDING UP THE PEOPLE FOCUS Retail Network

TATIANA VOJKOVIČOVÁ HR Partners Manager – Slovnaft CARMEN BECKER “HR’s main task is to conti nue supporti ng HR Manager – MOL Romania the business by managing customer VESNA PENAVA “I am very proud to be part of a orientati on strategy change and cultural HR Director – Holdina and Energopetrol moti vated and energeti c team focused JELENA BIGOVIC “To promote positi ve values, behaviour HR Specialist – MOL Serbia transformati on at service stati ons through a on meeti ng increasing market demand. and excepti onal work achievements “MOL Serbia established the ‘Working reshaped competency-based model. In this In fact, MOL Romania team engagement way, we will increase employee moti vati on further, a new reward program enti tled exceeded the European oil industry at service stati ons program’ in Q3 2013. Employee of the Quarter has been All head offi ce employees parti cipated and performance by using key indicators to average and this will make it possible for achieve higher overall business results.” launched. It provides for the selecti on of the business to grow even further.” in the fi rst phase and spent one working the best two employees in Retail every day with their front-line colleagues in quarter. The program is designed to the service stati on network. In this way, embed highly positi ve behaviour that we got to know our customers and their will reinforce business goals.” requirements bett er and now we all spend our ti me trying to sati sfy them by going the extra mile in our daily jobs.”

MÁRTA BOCSI HR Partner – MOL “Our 2014 priority is to run a culture ZOLTÁN IZLANDY change program to increase employee HR Manager – Slovnaft Česká Republika & Pap Oil cooperati on so as to build an “MOL Group recently acquired the Agip retail atmosphere of higher performance network from Eni, thus becoming the second among those employees who are ready biggest player in the Czech fuel retail market. to seize the opportuniti es provided by This poses a challenge to HR because integrati on MOL’s partner network.” has to be implemented across three companies to produce one eff ecti ve organisati on with a common company culture.”

MARINA CVIRN MAJA KAVAŠ Director of Retail HR Department – INA HR Manager – MOL Slovenija “INA Retail HR has two prioriti es for 2014. “Increasing sales at our service stati ons RETAIL AT INES HORVAT The fi rst is to focus on our best employees is our main focus. The RODEO program, MOL GROUP HR Manager – Tifon and increase their moti vati on, while the a tailor-made training course for “Sati sfi ed employees are our key goal. second is to provide acti ve support to the service stati ons, will empower our most FACTS AND FIGURES Tifon seeks to foster team spirit and business by successfully implementi ng the important teams – the front-line people • 4 300 000 000 litres per year positi ve atti tudes among employees so entrepreneurship project in the Zagreb region.” at service stati ons – to serve customers • USD 4 500 000 000 net revenue as to eff ecti vely increase moti vati on and in the best ways possible and ensure • 11% non fuel share of net revenue enhance service levels as key drivers to highest possible service levels.” • 1 720 service stati ons achieving excellent results in the upcoming business period.” • 750 000 fuel transacti ons per day 22 MOL GROUP Panorama • 8 brands in 11 countries July 2014 23 fl agship news fl agship news

News in brief MOL HUNGARY BEST CORPORATE FIRST OFFICIAL VISIT OF TPAO TO THE BAITUGAN FIELD PROGRAM LAUNCHED GOVERNANCE MK Oil & Gas B.V. became the sole par- Effi ciency, profi tability and sati sfacti on – these objecti ves ticipant in BaiTex LLC (Russia) after MOL determine the MOL Hungary 2014 Program. MOL Flagship AWARD FOR INA Group sold 49% of its share to the Turk- Management has set tangible targets that provide vision “World Finance”, a UK magazine, has ish Petroleum Corporation (TPAO) in a for the Flagship and all its employees. They have developed presented an award to INA in the catego- deal being closed on 31 March 2014. a pyramid-like system, consisti ng of four levels, where the ry of “World Finance Corporate Gover- Since then, the new joint operation has begun and the first official site visit to Flagship’sM objecti ves are divided into specifi c organisati onal Bnance”, based on the opinions of business the Baitugan field was held on 27 May targets and personal performance indicators. The three and fi nancial journalists and supported by a research team. “We are very proud to 2014 in the form of the Technical Sub- objecti ves on the peak of the pyramid are effi ciency, committee Meeting. profi tability and sati sfacti on. There are seven goals relevant be the winner of such a signifi cant award and to be recognised among the best for all units on the next level supporti ng the realisati on LEAN LAUNCHED IN TVK companies in the world for our corporate of the top three: all functi onal and business units aim to The LEAN program, launched in the reach these goals. These upper two levels can be primarily governance structure. This is yet more TVK Olefin-2 Plant in May, reached interpreted on company level. proof that the company is run success- the fourth phase, ‘Implementation’, On the third level, parti cular strategies are defi ned for fully and according to European and in recent days. As in the Danube Refin- business and functi onal units. On the bott om, there are internati onal best practi ces” said Zoltán ery, there are 3 workstreams at TVK: specifi c acti ons and tasks that can be interpreted even on Áldott , President of the INA Management Operation, Maintenance and employee level, and which are included in employee KPIs as Board. The winner is selected based on Energy & Yield. 6 experienced LEAN well. Sándor Fasimon, COO - MOL Hungary highlighted: ”The the effi ciency of its governance structure, Navigators joined the TVK team, name Flagship is indeed perfect in this case, because we are the work of company committ ees and warmly welcomed by colleagues. in fact working just like a ship. Our directi on is the same and necessary quorums for making decisions, SLOVNAFT AND PAP OIL we have a common desti nati on.” board compositi on and independence, shareholder rights, risk management pro- SERVICE STATION DEALERS’ cedures, disclosure of relevant informa- MEETING ti on about company results, transparency More than a 100 service station deal- ers and representatives of Slovnaft, and remunerati on. Slovnaft Česka Republika and Pap Oil met at a whole-day conference taking MOL SLOVENIJA OPENS place close to Prague. This long-planned event was held to introduce MOL ITS 33RD SERVICE STATION Group, its objectives, strategies, focus MOL Slovenija continued its investment strategy with and the future development of Slovnaft the opening of its 33rd service station, this time in and Pap Oil service stations Ptuj, the oldest town in Slovenia. The new service in the Czech Republic. station operates on a 362m² site which also includes a shopping area, car wash and bar. In addition to motor INTERNATIONAL AWARD FOR Mfuels, the citizens of the Municipality of Ptuj will also MOL HUNGARY EXPERT be able to fill up with autogas (LPG). A donation to the Our colleague Dr. István Csató is the local kindergarten was made at the opening ceremony first expert to develop, with his co- together with the first filling of the tank of petrol, which authors, an officially termed “three- was donated to the Ptuj Voluntary fire brigade. dimensional stratigraphic model of the Messinian crisis in the Pannonian Basin in Eastern Hungary”. As a result, he has won the Robert Mitchum Award from EAGE, the European Association of Geoscientists & Engineers, the eminent GROUP PROCUREMENT European professional association. INTEGRATION DAY IN BRATISLAVA FIRE PROTECTION MONTH AT INA NEW DISCOVERY IN KAZAKHSTAN At INA, May is traditionally the month 33 MOL Group procurement managers and experts from 11 countries met in Bratislava A new discovery has been recorded in the Carboniferous period Bashkirian ti er’s sediments of the when close attention is paid to fire pro- on the traditional Group Procurement Integration Day, in May. For the first time Rozhkovskoye fi eld in the Fedorovsky Block, Kazakhstan. Specifi cally, an infl ow of high-quality light tection as it is the month which marks procurement leaders of Upstream subsidiaries joined the event also. The Integration crude oil and gas with maximum fl ow rates of 1.9 mbbl/day and 6 million cubic feet/day (1 mboe/day) International Fire Fighters’ Day. This Day provided great opportunity to address common topics and pin-point sensitive respecti vely have been recorded. These fl ow rates were on a relati vely small choke of 24/64’’ or 95 G year, through a series of informational issues. As Dario Bogdanovic, Head of Group Procurement underlined the main mm and were produced while testi ng the Bashkirian reservoirs. Previous explorati on had targeted the activities and exercises throughout message: “The vision of Procurement is to assure first class service to Businesses INA, the importance of education and Bobrikovskiy and Tournaisian horizons, so the discovery of oil reserves in the Bashkirian had not been N through optimally balanced quality, price and lead time.” prevention was stressed as a means included in the previous resource and reserves assessment. The positi ve test results from the new of avoiding situations that can lead to Bashkirian discovery will signifi cantly increase the fi eld’s reserve prospects. Quanti tati ve evaluati on of fires. As usual, all the activities of this the reserve is underway and MOL Group expects additi onal increases following the results of further Fire Protection Month culminated in a explorati on and appraisal of the Fedorovsky Block, in which MOL Group has a 27.5% working interest. joint INA fire drill, held in Solin. Partners in the Block are KazMunaiGas E&P with 50% and FIOC with 22.5%.

24 MOL GROUP Panorama July 2014 25 in detail in detail DID YOU KNOW? WORKING WI TH GOVERNMENTS AND OTHER K EY STAKEHOLDERS

Dr. Péter Gordos % Mission: To ensure that MOL Group gains and Director of MOL Regulatory and Public Aff airs 80of laws adopted at the nati onal level are devised and agreed in Brussels. All EU Insti - retains a sound economic ‘licence to operate’ We are a highly professional internati onal team Recent cases include successful advocacy in gas tuti ons and a great number of stakeholders of people with backgrounds in business and price and mining royalty regulati on, Natura 2000 area explorati on and producti on licensing, land tax and are involved in the decision-making process, for all its business segments in current and internati onal relati ons who work closely with which can take up to 6 years. bio-fuel regulati on revision, and Energy Effi ciency & future politi cal and legislati ve environments colleagues both at HQ and Flagship levels. Industrial Emissions Directi ves implementati on. Jaroslav Košťálik Director of Regulatory and Public Aff airs – Slovnaft NATÁLIA SOCZÓ LEVENTE JUHÁSZ KRISZTINA MÁTÉFY SENIOR ENERGY POLICY EXPERT – EXPERT – GROUP EXPERT – GROUP Slovnaft Regulatory & Public Aff airs tracks ever-changing INTERNATIONAL PUBLIC AFFAIRS EU REGULATORY AFFAIRS EU REGULATORY AFFAIRS Slovakian legislati on. Our team is responsible for the coordina- ti on and preparati on of complex regulatory submissions, as well as dealing with various public policy issues.

ILONA VÁRI 200+ MARCUS LIPPOLD EU legislati on have a direct or indirect VICE PRESIDENT – THEMATIC LEADER – MOL GROUP BUSINESS EU REGULATORY AFFAIRS Adriana Petrović impact on MOL Group operati ons, includ- STRATEGY AND REGULATORY Enterprise Relati ons Sector Director – INA ing areas such as: accounti ng, competi - & PUBLIC AFFAIRS Our eff orts focus on opti mally safeguarding INA’s interests ti on, investment, procurement, taxati on, when implementi ng EU and Croati an legislati on. We closely environment, transparency, infrastructure cooperate with Business Units and have comprehensive MOL and energy security. Group PA & RA support to help us achieve this.

Márton Pálmai MOL Group representati ve in Brussels As MOL Group conti nues to grow in Europe and beyond, it becomes increasingly important for us to be able to $5.9 BN make our case in the heart of European decision-making and to be viewed as a trusted partner in discussions of is the combined downside potenti al from economic and politi cal challenges. Our representati on all EU and nati onal legislati on on MOL busi- in Brussels is key to establishing contacts with leading ness. The impact of the single biggest piece EU offi cials and other stakeholders, cooperati ng with of unfavorable legislati on could be as high European associati ons, infl uencing policy making and as USD 800 million. increasing the visibility of the company. The oil and gas sector is a highly regu- lated industry that is and will conti nue to stay in the spotlight of regulators and MANAGING EU INITIATIVES REPRES- governments. Our business is at the intersecti on of geopoliti cs, energy policy ILONA FODOR CLOSE COOPERATION WITH BUSINESS AND FLAGSHIP ADVISOR – ENTATIVES MARIA-ANNA STAKEHOLDER TEAMS and traditi onal business. Since energy, INTERNATIONAL PUBLIC AFFAIRS KARAGIANNIDOU-ROSIEK 50from diff erent Business and Functi onal ANDRÁS BÁCSI-NAGY EXPERT – GROUP climate change and food producti on de- THEMATIC LEADER – EU REGULATORY AFFAIRS Units represent MOL Group in 4 Interna- fi ne the energy triangle, the regulatory INTERNATIONAL PUBLIC AFFAIRS ASSESS IMPACT ADVOCACY ti onal and 9 European professional associa- ON BUSINESS ti ons as part of their jobs. EU Regulatory Af- and politi cal environment has become fairs works in close cooperati on with these highly criti cal to the success of our op- MOL Group is seen as a reputable, trusted Eastern Europe and prepare assess- representati ves to coordinate their acti ons. erati ons. Our teams focus on mapping partner of governments, internati onal ments of proposed changes and their EU INSTITUTIONS risks early, limiti ng the damage from ex- bodies and local communiti es specifi cally in impact on MOL operations. Commission, Parliament, Council isti ng policies and infl uencing new policy our countries of operati on – and is sought Aft er careful analysis with other experts MOL Group held its Annual ASSOCIATIONS Recepti on in Brussels now, decisions where possible. We proacti vely out for its opinion and views on matt ers of across the company, we engage with establishing itself in the engage with colleagues in operati ons interest to MOL Group. decision-makers and key stakehold- THINK TANKS heart of Europe. MOL Group to ensure measures adopted do not We are closely engaged in various policy ers on internati onal level. We also reach invites a diverse round of run contrary to our business interests fi elds, such as energy, the environment, out to nati onal administrati ons, mainly MONITOR SUPPORT 120 guests to the event, and identi fy the most effi cient ways of taxati on or company law, as well as broader through our regulatory colleagues at IDENTIFY BUSINESS IN including Hungarian VIPs and implementi ng legislati on. politi cal topics such as climate change and Flagships, with whom we cooperate on REPORT ADOPTION Hungarian and internati onal Our mission is to ensure that MOL energy security, which are currently high a daily basis. We coordinate the work of TIMES contacts working at various MOL GROUP BUSINESS AND FUNCTIONAL UNITS 6 EU insti tuti ons, many of Group speaks with one voice on on the agenda of governments, NGO’s and colleagues representi ng MOL Group in whom acti vely support our key policy and regulatory issues when- infl uenti al think-tanks. key nati onal, European or internati onal acti viti es and goals. ever this is in our current or future We monitor energy policy and regula- associati ons, ensuring that our interests business interests. We make sure that tory changes in the EU/Central and are coherently represented. Acti viti es of EU Regulatory Aff airs Team

26 MOL GROUP Panorama July 2014 27 SD & HSE SD & HSE CHANGING HSE BEHAVI OUR TO CREATE VALUE Interview with József Molnár, Group CEO, Interview with Donna Darzentas, programs through eff ecti ve implementati on. MOL has made good progress over the Senior Vice President – Group SD & HSE There are numerous gaps and these need last few years. However, what is really and Donna Darzentas, SVP – Group to be addressed. The focus should be on important is that HSE strategy is in line with It’s been more than a year since you joined three areas; fi rst, we have to make sure that the new organisati onal changes and new SD & HSE, about how we need to change MOL Group with 30 years’ experience plant & equipment is fi t for duty. Next, we business strategies. That was and is our aim. our corporate culture and HSE behaviour in the fi eld of HSE. What, in your view, is need to focus on our management systems In HSE, there are numerous external driv- the greatest challenge MOL Group HSE and procedures and, last but not least, on ers, including EU Directi ves and Member to position the company for success. is currently facing and what is its most the culture and behaviour of our people. If State laws and regulati ons, not to menti on encouraging achievement so far? we only focus on improving equipment, for increasing external stakeholder impact, such as customer pressure and broader Interview with József Molnár, general awareness of and focus on HSE. The Group Chief Executi ve Offi cer bott om line is, HSE can either add value to an organisati on or, if there is a catastrophic What is MOL Group’s vision for HSE? Leaders are key Everyone is accident, it can destroy value. The new HSE What are your expectati ons of MOL to driving culture responsible for HSE, strategy will help us to create value and Group SD & HSE? change in not just for Sustainable Development by delivering im- Our vision is to be in the Top Quarti le in proved performance. That is probably the three key areas: safety, meeti ng environ- the Group. themselves, most important outcome of our eff orts. mental requirements and sustainability. We but for their conti nue to monitor our performance in the colleagues. What are the key Dow Jones Sustainability Index. We were improvement areas for 2014? among the index’s Top 10% companies a Our contractors should be respected and There are three areas. First, we really need few years back and are determined to stay treated as equals by our employees. to focus on improving HSE culture and HSE in the top 20%. Our vision is to improve our It is also criti cal to further develop the HSE awareness. Everyone is responsible for operati ons and protect our employees. skills and competencies of our leaders. What I am really encouraged by is how well HSE, not just for ourselves, but also for our In creati ng a new Group-level strategy and We have to understand the risks and Sustainable Development has progressed colleagues. We need to ensure that leaders management system, we had to streamline focus on shaping behaviour. We want in MOL Group. Although not necessarily drive cultural change and people really take and clarify the rules. It is now the responsi- leaders to recognise people more visibly a Group-level program, today, hundreds the ti me to understand risks and to work bility of our operati ons people to carry out and consistently for good behaviour, but of diff erent acti ons in our operati ons are safely. Second comes process safety with the their implementati on. if people repeatedly do not behave in the being implemented. The biggest challenge aim of achieving zero operati onal accidents. right way, there must be consequences. is to strengthen the foundati on of our HSE Again, this is a questi on of knowing and For 2014, Group HSE is aiming for understanding the risks within our operati ons a step-change in the fi eld of Process BUSINESS CARD and managing and improving risk reducti on. Safety Management. How? And why Eff ecti ve from 1 April 2013, Donna Third, our co-operati ve eff orts to really is this important for MOL Group? Darzentas was appointed Senior Vice reduce our eco footprint and environmental 2017 PSM is one of our main areas of focus 2014-2017 President - Group SD & HSE. Donna is emissions are vitally important. because we want to improve the integrity HSE STRATEGY: VISION: ASPIRATIONS TO a former Vice President, HSE in Walter IMMEDIATE ACTIONS Energy, an internati onal mining com- WORLD CLASS How do these focus areas and acti ons of day-to-day operati onal performance. HIGH-LEVEL OBJECTIVES pany specializing in metallurgical coal This is the way to conti nue delivering add- producti on and processing. She also support Group business prioriti es? ed value to the bott om line. Our challenge, worked between 1996 and 2005 in sev- Our strategy and acti on plans absolutely therefore, is to identi fy and then manage eral leadership positi ons in BP, includ- support our Upstream and Downstream the greatest threats to our operati ons. HEALTH & SAFETY ing the positi on of BP Global Vice Presi- businesses. HSE needs to shift from being just • Aim at Zero Incidents We must seek to avoid any catastrophic TOP QUARTILE ENVIRONMENT dent - Health, Safety and Environment another priority to becoming a true value for HSE Strategy • Strengthen Facility Safety for North America. incidents, even minor ones. • Improve Contractor HSE Management all our employees. We are in the process of • Ensure Healthy Workplaces developing business cases to demonstrate How can we improve HSE eff ecti veness how improved HSE performance can add and results throughout the enti re ENVIRONMENT example, without giving employees the tools value to our business. It is a long journey, organisati on? HSE Management • Address and Maintain Compliance to operate the equipment in the right way, but we have started. We have now developed aligned bott om-up • Improve Eco-effi ciency then we are going to fail. In the same way, System • Support Environmental Stewardship and top-down acti on plans to implement when you have good systems and programs, What are the immediate next steps

the strategy across our operati ons. It is very DJSI20% TOP but the tools and equipment are obsolete, to improve HSE awareness across important for the leaders concerned to focus MANAGEMENT SUPPORT employees cannot do a good job in improving the organisati on? on implementi ng these plans. Leaders are MOL HSE Group • Improve HSE Engagement TOP QUARTILE SAFETY performance. Therefore, the big challenge for To strengthen HSE awareness, what is key to driving culture change in the Group. Operating Regulations • Streamline HSE Management Systems us is successful implementati on. needed is bett er communicati on and • All employees are responsible for the safety Strengthen Assurance and Audit stronger, more visible leaders to seize the of their colleagues and contractors who How does the new HSE strategy opportunity to change our culture, the undertake high risk tasks in our operati ons. help to achieve Group HSE’s vision? true driver of HSE behaviour.

28 MOL GROUP Panorama July 2014 29 corporate responsibility & sponsorship corporate responsibility & sponsorship

BEAUTIFUL GREEN PARK AND MOL CHAIR FOUNDED AT MISKOLC UNIVERSITY News in brief As part of the three-year strategic cooperati on between MOL Group CYCLE PATH RECREATED BY and fi ve Hungarian universiti es, the second MOL-supported Faculty in Hungary was launched in June in Miskolc. The Faculty’s primary SLOVNAFT AWARD-WINNING MOL GROUP HQ VOLUNTEERS task will be to create hydrocarbon-related studies, focus on current KINDERGARTEN OUR CRICKET oil engineering training and introduce MSC hydrocarbon geo-science By reconstructi ng the old unused premises of a nearby academy, a modern facility for The very 1st MOL Group HQ Volunteering Day successfully took place training in the English language, commencing in autumn 2015. The fi rst on 10 May 2014. The event aimed to raise public awareness of safe the children of employees was created, CHAMPIONS – MOL Chair was founded at University of Pannonia in 2009. transportation and the responsibility we all share for road safety. M the Slovnaft áčik nursery and kindergarten, 103 MOL Group HQ Volunteers participated in the event, creating a MOL PAKISTAN TEAM located in Vlčie Hrdlo. For this endeavour, Bbeautiful park and repainting a cycle path for all cyclists and for the the Brati slava Refi nery received the GREAT KAYAK- 11th Budapest district community. The Volunteers’ Club is a long-term They say “Winning isn’t everything, but wanti ng to win presti gious 2013 Via Bona Slovakia award MOL Group initiative to repay the communities in which it operates. is,” and that is exactly what MOL Pakistan Cricket team CANOE WORLD CUP in the Top Employer category. Slovnaft áčik MOL Group volunteers hold two events a year to demonstrate wanted from the start of the 5th Oil & Gas Corporate facilitates the return to work of women engagement with local communities. OCricket Cup (OGCC). This annual T-20 Cricket Cup (OGCC) SUCCESS FOR MOL following maternity leave. is played among the 8 major E&P companies in Pakistan. The MOL Pakistan cricket team won the event three CHAMPIONS THE 40TH INA DELTA RALLY ti mes in a row in 2009, 2010 & 2011. This year, the fi nal Kayak-canoe champions, supported by MOL, made HELD ON MOUNT SLJEME, CROATIA was played on 13 April between MOL Pakistan and the World Cup held at Szeged an unforgett able The 40th INA Delta Rally, the oldest Pakistan Oilfi elds Limited (POL). MOL Pakistan created Gday out for the fans. Danuta Kozák won 2 gold and most popular motor racing event in history by winning the fi nal match and clinching the medals, Miklós Dudás set the record in sprint Croati a, was held in Zagreb and on nearby trophy for the fourth ti me in this tough nati onal sport! and Atti la Vajda gained one silver and one bronze Mount Sljeme, on 9-10 May. This FIA Rally, medal. Young Kayak-Canoe competi tors who are Central European Zone Championship, parti cipants in the MOL Talent Support Program enables parti cipants to collect credits to also performed very successfully. progress to the European Championship and World Rally Championship.

MOL SLOVENIJA HELPS SLOVNAFT POMURJE SHELTER MOL Slovenija head offi ce employees CEO RECEIVES donated to the non-profi t organisati on Po- murje Safety House which off ers shelter to PRESTIGIOUS women and children who need a safe place LÚČNICA AWARD to stay or sleep over due to diffi cult family Oszkár Világi, CEO - Slovnaft , has been presented situati ons. In May, employees collected with the presti gious “Lúčnica Award” by Štefan and handed over products to the House de- Nosáľ, founder and former arti sti c director of clared most in need – especially food with Sthe Lúčnica Slovak folk ensemble. The award is longer use-by dates and children’s clothing. given to individuals who support the long-term preservati on and development of folk traditi ons on MOL MOTORBIKE FAMILY COMES a professional level. The Lúčnica arti sti c ensemble TO THE AID OF LOCAL COMMUNITIES is the best-known folk group in Slovakia with more MOL Hungary’s new initi ati ve, the MOL than 50 years’ of traditi on. Motorbike Family Program was founded to unify the nearly half million motorcyclists and scooter riders in Hungary and to help local community initi ati ves, such as remedia- ti on and restorati on work aft er natural catas- trophes, blood donati on, and reconstructi on of neglected playgrounds. MOL Motorbike Family honorary ambassadors, well-known FLOODING IN CROATIA AND arti sts, musicians and TV presenters will SERBIA – INA COLLEAGUES KURDISH STUDENTS AT encourage motorbike and scooter riders to MICHELISZ join the initi ati ve. TO THE RESCUE! HUNGARIAN UNIVERSITIES HITS WTCC BIRD-FRIENDLY During May, Croati a, Serbia and Bosnia were hit by heavy The Kurdistan Region of Iraq (KRI) and Hungary have been RACES IN THE BRATISLAVA REFINERY conti nuously strengthening their university relati ons since M After returning from wintering in sub- fl ooding. INA and MOL colleagues reacted immediately. The INA Volunteers’ Club organised the donati on of more than 3 tons 2012, when a scholarship program started for Kurdish students CEE REGION Saharan Africa, small migratory house Fof clothing and bedding, 1.5 tons of hygiene supplies, 0.5 tons supported by MOL Group. In the next phase of the program, martins found ready-prepared artificial of food and more than 2,000 litres of water, while MOL Serbia ten newcomer students will start their studies at the Budapest IN MAY nests in the Slovnaft refinery complex. employees organised evacuati on, transport and accommodati on KTechnical University (BME). They were welcomed by Tibor If all of them are adopted, they could for victi ms in Obrenovac. INA has also donated 64 000 litres Szatmári, Ambassador to Iraq, Csaba Vezekényi, General Consul, Results of MOL Group WTCC driver, Norbert Michelisz from the 3 racing weekends in the CEE region: raise over 500 hatchlings during the of Eurodiesel to the region in Croati a and 6 500 litres of fuel in KRI, as well as by Szabolcs I. Ferencz, SVP – Group Corporate • 6 races in 3 Grand Prix – Hungary, Slovakia, Austria season. The house martin nests were Serbia. Additi onally, INA donated 65 000 EUR to the Red Cross Aff airs, Ádám Homonnay, VP – Group E&P Business Support, and • 40 points gained – 9th place in the overall rankings created by Slovnaft in cooperation with while MOL Serbia helped with 8 500 EUR the inhabitants of the Zsombor Marton, CFO – MOL Kalegran. • 1 podium result in Slovakia the Slovakian Ornithological Society fl ooded areas and donated fuel in the same amount, 8 600 EUR • 58,000 visitors at the Hungaroring – 100th Michelisz race in the history of WTCC “BirdLife Slovakia”. to the Red Cross of Valjevo and Loznica towns. • 500 million TV viewers worldwide

30 MOL GROUP Panorama July 2014 31 success stories your voice OUR IDEAS IMPLEMENTED READERS’ FEEDBACK – LEAN ON THE SPOT Dear Colleagues, will lift our external communicati ons eff orts You are by now enjoying reading the third signifi cantly. Also, we went online with DOMINIC KÖFNER issue of our MGP and I am happy to see and the new MOL Group Intranet (GP) which VICE PRESIDENT – We have all heard about LEAN and we all know the buzzwords; “waste”, “value-added ti me” hear that this magazine is contributi ng well will be a milestone in our internal com- MOL GROUP CORPORATE COMMUNICATIONS and “necessary, but not value-added”. The essence of these words is simple: LEAN frees ti ed- to achieving the ambiti ous business objec- municati ons processes. We are making up company resources such as energy, assets and human resources. But how does LEAN work ti ves we have across the enti re Group. How- progress step by step and I can certainly in actual day-to-day practi ce? How can the basics of LEAN be applied to our processes? ever, this is only one communicati ons tool promise you: this is only the start of our What makes the diff erence if you compare the LEAN approach with other effi ciency of the many we have developed recently. journey towards bett er communicati ons. improvement methods? Below, we off er three easy examples among several hundreds of how I am proud to announce that in a couple of days we will go online with our new MOL Very best regards, MOL Group is applying the LEAN philosophy to our everyday working lives. Group website (www.molgroup.info), which Dominic Köfner

OPTIMISING RAIL LOADING PROCESS HILMI AL SALMI, HSE expert and BRATISLAVA REFINERY ! ISSUE ABDULLAH AL GHAFRI, Ability to load up to 9,000 tons in 24 hours vs. current 6,000 tons Growwwer, MOL Oman MGP gives us a bett er insight ? SOLUTION into the respecti ve acti viti es of LADISLAV PROCHÁZKA Increasing loading capacity of light products through the various affi liates of MOL Group. closer cooperation on all levels, implementing new We found the magazine to be a External Communicati ons, Slovnaft operating model via dashboard & tachometer, and We have long planned to create a visual map showing shortening the loading process great knowledge management tool to learn more about the worldwide the core acti viti es of an oil company to bring our partners and journalist contacts closer to what MOL BENEFIT acti viti es and organisati on of : our Group. Group and Slovnaft do – from discovering oil to Loaded product volume increased from 5,200 tons to 8,700 tons selling it at our service stati ons. We were therefore in 24 hours. No investment KRISTIJAN RUKAVINA very glad to open the latest MGP and discover the infographic ‘The Way of Oil’. By adapti ng the text into > PRINCIPLE FOLLOWED Waste elimination Planning & Controlling Growwwer, the Slovak language, we now have an excellent tool MOL Group for our external communicati ons. As a Growwer, I have found the many interesti ng arti cles in MGP since its DALIBORKA DRAGAŠEVIĆ ISSUE launch to be an invaluable window on the MOL Group. Reading about our 41,000 maintenance working permits issued per year, costing Fuel Card Customer Service, ! 5,000 shift leader administrative working hours per year as a result acti viti es, people and achievements TIFON card department WORK PERMITS PREPARATION in the previous two editi ons served as of long queues of workers waiting for permits Transparency and the sharing of informati on something of a newcomers’ guide and should be encouraged in every aspect of SOLUTION helped me to identi fy more closely Subcontractor workers partially ll in their own data in the work with the Company as a whole. business – especially when it comes to a dynamic ? permits themselves – shift leaders check them and sign forms after multi nati onal company in an industry undergoing providing safety conditions. constant changes. MGP certainly contributes to : BENEFIT this informati on exchange, so I congratulate all 60% less paperwork for shift leaders and 3000 waiting hours those involved. Keep up the good work! fewer per year

> PRINCIPLE FOLLOWED Reduction of necessary, no value-added activity

INCREASE GASOIL YIELD OF GHT-1 UNIT PROBLEM DANUBE REFINERY ! High gasoline yield at GHT-1 unit can cause lower gas oil amounts

? SOLUTION Gasoil stabiliser operating parameter optimised MOL SLOVENIJA BENEFIT Wholesale & Supply team : 3% gasoil yield improvement = EUR 670k per year; Even though we hear about Upstream almost daily, the Fuel gas consumption reduction ~3GJ/h = EUR 220k per year presentati on of this segment, in the second issue of MGP, fascinated us with news of the Group’s ambiti ous plans > PRINCIPLE FOLLOWED and the diversity of Upstream acti viti es. It is also great to Value-added increase know about news, acti viti es, projects and achievements of other MOL Group members collected in one magazine – LET US KNOW YOUR OPINION! the shear breadth of our operati ons is clear to any reader MGP INFOLINE: just by perusing the magazine. [email protected]

32 MOL GROUP Panorama July 2014 33 barrel per day next edition: petrochemicals

The Expert’s Column. The Chief Economist Team’s insight BARREL and guide to today’s trends and future developments. MOL GROUP PER DAY Read more at barrelperday.com

PETROCHEMICALS›

OLEFIN UNIT RUSSIAN GAS AND EUROPEAN LDPE UNIT HDPE UNIT POLITICS: I WANT TO BREAK FREE… BUTADIENE UNIT

DEPENDENCE ON RUSSIAN NATURAL GAS (2013) Around Imports from Russia as a % of total natural gas imports

100% FIN % 67% A 25of the 65% H EU’S GAS 39% D comes from 16% F 0% GB Russia

Sources: WTO, U.S. Census Bureau, Eurostat

ussia’s asserti veness in the solar and wind power, the price of which all the gas it needs – although probably at Ukrainian crisis has taken has steadily been declining in recent years. higher prices. As for Hungary, there are two many – including us – by sur- Secondly, LNG imports could be increased. urgent steps to be taken: completely fi lling prise. By the ti me you read Europe already has huge underuti lised LNG up gas storage units and quickly fi nishing the this arti cle, the situati on may import capacity; globally there is plenty of Hungarian-Slovakian interconnector, which well have changed again. But, however it all gas – further imports could come from the could alleviate a bott leneck of gas coming turns out, the Ukrainian crisis will certainly Persian Gulf, East Africa, the Levant Basin or from the West. have a lasti ng impact on European policy- even the USA. Thirdly, the Ukrainian crisis Of course it is not just the physical making, in parti cular its energy policy. may overwrite current public resistance to quanti ty, but also the price of imported Currently, Russian natural gas accounts domesti c unconventi onal producti on in the gas that matt ers. A long, bitt er Ukrainian for over 25% of European consumpti on. EU. Fourthly, pipeline connecti ons in Central civil war, the further deteriorati on of The fact that this is a mutually dependent and Eastern Europe would need to be Russian-Western relati ons or the halti ng of relati onship will not appease European strengthened as plenty of gas cannot reach all westbound Russian gas exports would voters. In the long-run, they will probably parts of our region. drive prices upwards. Overall, signifi cantly want to reduce their reliance on Russian Of course, the fact that we might not reducing European gas imports from Russia energy supplies, both to increase future need Russian gas in 10 years is no comfort and thus easing its leverage over the CEE room for maneuver, as well as to avoid for what may happen next week. At the region is possible. But the EU should forget “rewarding” and strengthening an ti me of writi ng, Western European gas the noti on that gas in its domesti c market aggressive Russia with signifi cant revenues. markets signal no stress at all. In fact, will be much cheaper than it is now. Diversifying away from Russian imports gas prices dropped signifi cantly recently is in fact possible; according to our calcula- due to the mild winter. In case of a halt in ti ons, we could largely eliminate European transits through Ukraine, some gas could be ISTVÁN ZSOLDOS gas dependence over a 10-year ti me span. rerouted through Nord Stream and more CHIEF ECONOMIST, MOL GROUP Firstly, we would need to cut back on gas LNG could be imported. If markets are al- PÉTER SIMON VARGHA CHIEF ECONOMIST, MOL HUNGARY consumpti on, primarily through energy lowed to functi on, even our region (Croati a, DIÁNA SZŐKE effi ciency measures, as well as increased Hungary and Slovakia) could most likely get SENIOR ECONOMIST, MOL GROUP

34 MOL GROUP Panorama OUR WATERS NEED PROTECTION!

THAT’S WHY WE TURN USED COOKING OIL INTO BIOFUEL! Cooking oil oft en ends up in the sink. A dangerous habit: just a drop of it can contaminate 1000 liters of drinking water. That’s why MOL Group has launched a program to collect and recycle used cooking oil. MOL Group’s every policy and decision is made to protect our vision of a bett er future.

RECOMMENDED BY TOMORROW.

MGP_Mag_210x297_DragonSink_V3.indd 1 30/06/14 12:55