Monday 19 April 2021

MOL launches updated, integrated long-term strategy

BUDAPEST, February 24, 2021

MOL Group, an integrated, international oil and gas company headquartered in Budapest, has launched ‘MOL Group 2030+’ a strategy fully integrated with a new sustainability strategy and complemented with a longer-term vision and ambitions beyond 2030. 
”The MOL 2030 long-term strategy has so far proved to be progressive, credible and directionally correct. Accordingly, MOL has taken important strategic steps in the right direction over the past five years.  However, we have observed an unprecedented pace of changes around us recently, including rapid progress in the green energy transition. Our updated strategy seeks to accelerate our transition process to enhance MOL’s resilience and our ability to shape a sustainable future. We will sharpen our focus, increase our efficiency further, while seeking new opportunities with a new determination. One thing has not changed since 2016: we remain deeply committed to the transformation of our traditional fossil-fuel-based operations into a low-carbon, sustainable business model,” said Zsolt Hernádi, Chairman and CEO of MOL.
MOL will continue and accelerate its fuel-to-chemicals transformation in downstream growing to become a leading sustainable chemicals company in CEE.
“One of MOL’s core strengths lies in its resilient, uniquely balanced, integrated business model. In order to preserve this resilience and to be able to shape our future, we will have to continually adjust our business portfolio to meet the challenges of a future carbon-constrained economy,” Hernádi said.
● Downstream: MOL Downstream will retain its top-tier cash generation position in European refining and targets more than $1.2 billion by 2025, supported by an additional $150 million of efficiency improvement. The fuel-to-chemicals transformation will continue at full speed to reduce motor fuel yield in the refining system and to convert 1.8 million tons to petrochemical feedstock by 2030. This will be achieved through two investment cycles using highly efficient technologies and targeted start-up dates in 2027 and 2030, respectively. At the same time, MOL will increasingly integrate circular technologies into its core businesses, using bio- and waste-based streams in production, scaling up recycling and utilizing CCS opportunities with a clear focus on materially reducing the segment’s CO2 footprint. The total Downstream transformation capex may reach $4.5 billion in the next ten years. 
● Upstream (E&P): Existing resources will continue to be managed to maximize cash generation and value creation with around $1.8 billion simplified free cash flow in 2021-25 at $50 per barrel oil prices (and assuming no inorganic reserve replacement). This requires the cost-conscious and efficient management of the CEE production decline and an active, but opportunistic approach to international E&P without setting any volumetric targets. MOL aims to utilize its expertise in the Pannonian basin geology to become a key player in carbon capture, utilization and storage (CCUS) in CEE by 2030, which will also support it becoming carbon-neutral (Scope 1 and 2).  
● Consumer Services: MOL aims to become a best in class digitally driven consumer goods retailer and an integrated, complex mobility service provider by 2030 with significantly higher revenues and free cash flow. Consumer Services will materially increase its contribution to the group by reaching over $700 million annual by 2025 and a cumulative simplified free cash flow of over $2 billion in 2021-25.
● Investing in new businesses to shape a low-carbon circular economy: MOL wants to significantly increase its EU Taxonomy-aligned climate-friendly investments to exceed 50 per cent of total capex by 2030 and to approach 100 per cent by 2050, or earlier. MOL also wants to play a key role in shaping the low-carbon circular economy with investments in new businesses such as waste integration and utilization, recycling, carbon capture, utilization and storage (CCUS), advanced biofuels and potentially hydrogen-related opportunities. In the next five years, MOL will spend $1 billion on new, low-carbon and sustainable projects to become a key player in CEE in the circular economy. 
● Significant carbon reduction targets by 2030, fully aligned 2050 ambitions with the EU Green Deal. In line with the Paris Agreement and the need for globally coordinated efforts to limit global warming and climate change, it is also the role of MOL to contribute to the decline in carbon emissions from its value chain and operated assets. Accordingly, MOL will reduce group-level emissions by 30 per cent by 2030, make both E&P and Consumer Services carbon-neutral (in terms of Scope 1 and 2 emissions) by 2030, while Downstream emissions (Scope 1 and 2) will be reduced by 20 per cent by 2030 (from a 2019 base) for existing operations. MOL also shares the EU’s ambition to be climate-neutral by 2050 in terms of all (Scope 1, 2 and 3) carbon emissions and wishes to actively participate in the industrial revolution required to make Europe carbon-neutral, both on its own and in partnering with others. 
A comprehensive sustainability framework sets targets along all four pillars: People and Communities; Health and Safety; Integrity and Transparency; Climate and Environment.
MOL sees diversity and inclusion as one of its key values and strategy enablers with targets to increase female participation at all levels, reaching 30 per cent in managerial positions and focusing on broader employee wellbeing and health.
Our sustainable employee engagement score will stay above 75; community engagement will intensify so that we become a trusted partner; Total Recordable Incident Rate (TRIR) will fall below 1.0 by 2025. We will instigate a new responsible procurement strategy across the group by the end of 2022; awareness of ethics and human rights will be further promoted among employees and management; and negative environmental impact (beyond CO2) will be further reduced. –Tradearabia News Service


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