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MOL buys £76m North Sea stake from Premier Oil

HUNGARIAN oil and gas giant MOL has agreed a $130m (£76m) deal to acquire more acreage in the UK North Sea as it seeks to expand its global portfolio.

The company is buying stakes in three producing fields and some exploration interests from Premier Oil in a move that will increase its North Sea reserves by around 50 per cent. The acquisition is the second MOL has made in the UK North Sea in six months.

MOL moved into the North Sea in December through a £230m deal to acquire 14 licenses from Wintershall in what it called a "milestone" move.

Yesterday the head of MOL's exploration and production arm, Alexander Dodds, underlined the company's ambition to build a "sizeable" portfolio in the North Sea as part of its internationalisation strategy.

He said: "This transaction extends the presence of MOL Group on the global map of offshore E&P and provides several additional strategic rationales.

"Building on our already existing assets in the UK North Sea, this acquisition represents a significant step forward in growing a solid sizable North Sea portfolio."

The acquisitions by MOL reflect strong interest in the North Sea among international oil and gas firms.

In December MOL's chairman and chief executive, Zsolt Hernadi, said the North Sea was the right region for the firm to make a strategic move.

He added: "The North Sea is a well-developed area and carries relatively low political risk compared with some of our other investments, which reduces MOL's overall exploration and production 'political risk' profile, and the United Kingdom provides a predictable and transparent regulatory environment."

MOL is acquiring stakes in the Scott, Rochelle and Telford fields in the Central North Sea off Scotland.

The stakes will bring MOL an estimated 14.3 million barrels oil equivalent reserves. Production from the assets has averaged 3,700 barrels oil equivalent per day (boepd) this year. It is expected to peak at 6,200 boepd in 2016.

The interests acquired from Wintershall contained around 28m barrels reserves. They are expected to produce around 1,000 boepd this year.

They include a 20 per cent interest in the Premier-operated Catcher development. Premier received official approval for the development in June.

Premier Oil's chief executive Tony Durrant, said yesterday: "This sale will allow our team in the UK North Sea to focus principally on our operated Solan and Catcher developments."

He said the assets it is selling to MOL had generated significant cash for the group.

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