Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
A top executive at Hungary’s leading oil and gas company has defended the country’s dependence on Russian energy, pointing to the “hypocrisy” among its western allies which are buying “repackaged” fuels from Turkey or India.
“Nobody says oil products refined in Turkey or India from Russian crude cannot enter Europe. Nobody protests, and their role keeps growing,” said György Bacsa, chief operating office of Mol, said in an interview, on the company’s relationship with the oil-producing nation.
Mol continues to buy Russian crude oil — enjoying an open-ended exemption of the EU’s ban on crude imports from Russia — even stepping in as manager of the oil traversing Ukraine after Kyiv barred Lukoil from using its stretch of the Druzhba pipeline in July. Bacsa said the company talked to Ukraine and Russia to ensure the flow of oil that remains vital to the region.
Budapest has been criticised for maintaining Russian energy imports even after the invasion of Ukraine, and Mol’s Russian ties have come under renewed scrutiny after Spain vetoed a €600mn bid by a Hungarian consortium for train maker Talgo last month.
Bacsa also chairs the Hungarian consortium bidder Ganz-Mávag. Spain blocked the deal over concerns Budapest could disrupt exports of vital parts to Ukraine — and the consortium’s links to Mol.
Spanish officials believe Ganz-Mávag is ultimately controlled by the Hungarian oil group, while several EU member states have been concerned about Mol’s links to Russia.
Bacsa, who criticised Spain for ignoring basic EU freedoms by vetoing the bid, also blamed Brussels for failing to secure energy alternatives for landlocked countries such as Hungary, like it did with vaccines.
“We are left to our own devices, and some countries cannot kick Russian oil and gas, while others engage in the hypocrisy of buying repackaged stuff, and enjoy the benefits,” he said.
The goal of sanctions was not to force European countries to their knees, but to end the war, he said. “We can’t have the sanctioning EU countries get weakened by their own decisions. That would not be a sanction. That would be a fatal own goal.”
Bacsa defended Orbán’s Russia-friendly government, noting it was not beholden to Moscow. Budapest even helped Mol to buy out Russian owners. Soon after taking the premiership in 2010, Orbán initiated buying back a 21.2 per cent stake in Mol from Russia’s Surgutneftegaz, a company that has had close ties with the Kremlin, for €1.9bn.
“We defended our interests against hostile Russian takeover attempt at a time when the rest of Europe stood in line for Russian investments,” Bacsa said.
Turkey, meanwhile, has increased its imports of Russian crude and exported the refined products to western clients, a Financial Times report found earlier this year. The Finland-based Centre for Research on Energy and Clean Air has also warned of western countries in effect evading sanctions.
One of the barriers to importing crude from other exporters is that Mol’s refineries were built to handle Russia’s Ural blend, and it would take at least two more years to revamp the facilities to refine other crudes grades from different producers.
It would also have to import crude from other producers via a southern pipeline, and build separate refining infrastructure which would cost about $500mn, Bacsa said.
He noted Croatian pipeline operator Janaf was taking advantage of its position as the only route to bring seaborne crude into central Europe and the sole alternative to Russia’s Druzhba, for increasing prices. Bacsa said Janaf was “one of the most profitable companies in Croatia”.
Janaf chair Stjepan Adanić has denied such claims, saying last month the pipeline was capable of supplying both Mol’s Hungarian and Slovak refineries at mutually agreed prices that “decline as the quantities of transported oil rise, and vice versa”.
