Mol And Croatia Agree on Swift INA Talks as Feud Eases

Hungarian refiner Mol Nyrt. is seeking “accelerated talks” on the management of its Croatian subsidiary INA Industrija Nafte d.d. in a sign that a feud with the Balkan state’s government is abating.

Mol agreed to increase exploration and production investments in INA during in talks with Croatian government officials that were “more cooperative” than past meetings, Mol Chief Executive Officer Jozsef Molnar told reporters today in Zagreb. The two parties agreed to seek a joint strategy and a new management model for INA, Croatian Economy Minister Ivan Vrdoljak told reporters.

“Based on this meeting today we are ready to continue the negotiations in an accelerated way,” the Hungarian company said in an e-mailed statement today.

Budapest-based Mol started arbitration proceedings against the Adriatic country in an international court in November as a dispute with Croatia over management rights in INA escalated. Croatia accuses Mol of having bribed then Premier Ivo Sanader to get management rights in INA and has issued an international arrest warrant for Mol Chairman Zsolt Hernadi as it probes Mol’s purchase of a controlling stake in the $7.3 billion unit.

Mol, which denies any wrongdoing, flagged its intention to sell its stake in INA if talks fail, the company said Nov. 8.

Mol jumped as much as 2.5 percent today, set for the highest close in more than two months, following the comments. INA shares have declined 6.9 percent this month.

Mol owns 49.1 percent of INA and exercises management control, while Croatia holds 44.84 percent.

Optimistic Tone

The two parties met twice last fall and left the negotiating table with “significant differences,” Molnar said after the last round of talks on Nov. 8.

“Today the negotiations were held in a much more optimistic tone, and we welcome Mol’s intention to increase investment in INA, which has been the government’s wish as well,” Vrdoljak told journalists.

INA’s output may increase by an additional 4,300 barrels a day in the short term if relevant permits are issued by Croatia. Production may rise by 9,000 barrels a day in the medium run, accounting for a 20 percent boost, according to the Mol statement.

Since the disputed 2009 accord on INA management rights, Croatia has sought to re-establish the state’s influence over the country’s largest publicly traded company. INA produced 38 percent of Mol’s hydrocarbon output in the first half of 2013.

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