petrochemicals - mol group italy

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MGP October 2014

Fourth Issue

PetrochemicalsMOL Group is strengthening its Petrochemicals segment with significant investments and expects considerable improvement in its position in the petrochemicals marketplace

THE WORLD OF MOL GROUP SCM Managing the supply chain –the “umbrella” function

MOL BUBI ON THE ROAD MOL Bubi, the new community bicycle system

NEW HR PROGRAMS To improve business performance

October 2014 3

contents

MOL GROUP PETROCHEMICALS IN NUMBERSFascinating facts and figures

WELCOMEZsolt Hernádi, C-CEO

INTERVIEW WITH SÁNDOR FASIMON AND OSZKÁR VILÁGIExtending the value chain

PETROCHEMICALSThe science behind Petrochemicals

INSIDERManaging the supply chain

GROUP NEWSProjects and developments worldwide

EUROPEAN WORKS COUNCILBehind the letters EWC

IN FOCUSProcesses & Structures for tomorrow

CONFERENCEThe largest oil gathering, 2014

FLAGSHIP NEWSOverview of local news and improvements

HR DEVELOPMENTWe are here to imporve business performance

INNOVATIONThe new community bicycle system – MOL Bubi

E&PA world-class business approach

PROBLEM SOLVINGThousands of ideas: EIFFEL and ÖTR

CORPORATE RESPONSIBILITY & SPONSORSHIPWhat we are proud of

SCIENCERacing fuel – we are now racing

IN DETAILMOL Group online communication platforms reloaded

BARREL PER DAYGuide to today’s trends and future developments

ISSUE 04 October 2014

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InterviewSándor Fasimon and Oszkár VilágiThe Group expects considerable improvement in its position in the petrochemicals marketplace

6EXTENDING THE VALUE CHAIN

interview

MOL Group is strengthening its Petrochemicals segment with significant investments in Bratislava and Tiszaújváros. New workplaces will be created in the Group and among our suppliers too. While the Group expects considerable improvement in its position in the petrochemicals marketplace. Sándor Fasimon, COO – MOL Hungary and Oszkár Világi, Chairman of the Board and CEO – Slovnaft, gave fascinating answers to our questions.

interview

he Petrochemicals field is an important pillar of Group Downstream, processing a large amount of refinery products. How

will recent investments by MOL Group change the value chain?Sándor Fasimon: In line with our strategy, these recent investments will extend our value chain, which today is fully integrated, from crude oil through to plastics. Due to the lack of lighter gas feedstock in Central Europe, MOL Group’s petrochemicals business consumes a mixed feedstock of naphtha, LPG and gas oil. This enables us to obtain heavier ethylene by-products. Significant investments have begun in both Bratislava and Tiszaújváros. At our site in the Slovakian capital, we’re modernising the LDPE product line with a new, state-of-the-art LDPE-4 unit, and we’re constructing a Butadiene Extraction/Synthetic Rubber (SBR) plant in Eastern Hungary. These steps will significantly strengthen MOL Group’s Petrochemicals segment. I firmly believe that we made the right decisions at the right time because these strategic moves will help us weather the stormy waters of the European Downstream business.Oszkár Világi: Long ago, refineries only processed crude oil, but fifty years ago production was expanded to include plastics. At Slovnaft, both these products are closely linked technologically and economically and our objective is to develop them even further. Ten years ago, we launched a new polypropylene production line, and today we’re building a new LDPE4 plant to produce polyethylene. Once it’s completed, sometime in late 2015 or early 2016, our production capacity will rise and we should be able to produce new types of polyethylene with better properties.

From the business viewpoint, this will bring new markets and customers, so that we fully expect to be among the absolute top companies in Europe in this field.

How does Petrochemicals affect Downstream’s generally unfavourable external environment? Will these new investments bear fruit?Sándor Fasimon: Due to this year’s results and short-term analyst forecasts, we look towards the future with cautious optimism. Butadiene prices are expected to rise from their current, relatively low levels. As a consequence, Butadiene production profitability will be restored to the level that made it an attractive investment option in the first place. As for LDPE4, we hope efficient operations will allow us to recoup investment expenditures from the very beginning through reduced production costs. Oszkár Világi: The new plastics production LDPE4 unit isn’t just about profit, it’s about re-placing obsolete equipment with something more up-to-date. At the same time, it ad-dresses production diversification at Slovnaft, thus underpinning Upstream operations that would otherwise not be justified. The global market for plastics is growing, so we believe this investment will contribute in the future, not only to Slovnaft’s figures, but also to those of MOL Group as a whole.

Are new Petrochemicals operations having any positive impact on employment in the CEE region?Sándor Fasimon: I’d say that Petrochemicals is a job creation engine. Through 2017, we’ll hire more than 130 new colleagues at our sites and the impact on our suppliers will be even more significant. We expect to create more than 600 new jobs during this period. Looking at it from a distance, petrochemicals

feedstock materials like butadiene will also help other industry players such as rubber production companies and that’ll move the broader economy forward.Oszkár Világi: By investing in LDPE4, we are demonstrating that we are a responsible employer, striving to ensure optimal employment both at Slovnaft and MOL Group into the future. The employees who will be operating this cutting-edge

technology will gain vital new skills and fresh technical knowledge, since LDPE4 is based on modern tubular technology that enables the manufacturing of about 30 kinds of polyethylene. Those not working at the new unit will still get similar opportunities in other production areas. Of course, a number of contractors are going to be working on the construction of the unit, again to the benefit of employment in the region.

In which areas are there synergies between Petrochemicals and Downstream’s other activities that can be exploited? Sándor Fasimon: There are many interesting intermediate chemicals along the propylene value chain that are currently being revised and may prove attractive. However, we wouldn’t enter any derivative business until the corresponding end-product markets appear to be more promising on the strategic

T

SÁNDOR FASIMON

OSZKÁR VILÁGI

The global market for plastics is growing, so we believe this investment will contribute in the future, not only to Slovnaft’s figures, but also to those of MOL Group as a whole.

Through 2017, we’ll hire more than 130 new colleagues at our sites and the impact on our suppliers will be even more significant. We expect to create more than 600 new jobs during this period.

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6 MOL GROUP Panorama October 2014 7

InfographicsPetrochemicalsAn important pillar of the Downstream value chain

10PETROCHEMICALS

10 MOL GROUP Panorama

infographics

October 2014 11

infographics

THE SCIENCE BEHIND

SOLD

PR

OP

YLE

NE

SOLD BUTADIENE

LDPE PLANT

HDPE PLANT

BUTADIENE PLANT (2015)

SYNTHETIC RUBBER PLANT (2017)

POLYPROPYLENE PLANT

REFINERY

STEAM CRACKER UNIT

PROPYLENE

LPG

GASOIL

PURCHASED PROPYLENE

DID YOU KNOW? In 1975, Steam Cracker Units in both Slovnaft and TVK started operations

• 1999 – MOL acquires its first TVK shares• 2000 – MOL becomes majority TVK

shareholder with a 33.34% + stake• 2004 – TVK is integrated into MOL Group – MOL acquires majority stake in Slovnaft – The Petrochemicals Business Unit is established• 2007 – MOL acquires a majority stake

in TVK of 94.86%• 2011 – Petrochemicals Business Unit is

integrated into the Downstream Division• 2013 – The foundation stone is laid for

an LPDE4 polyethylene production unit in Bratislava, Slovakia

– The foundation stone is laid for a Butadiene Plant in Tiszaújváros, Hungary

MILESTONES IN PETROCHEMICALS HISTORY

DID YOU KNOW? Steam Cracker Units......highest temperature: +850 °C ...lowest temperature: -150 °C ...temperature difference: 1,000 °C

• 2 in Tiszaújváros – 660 ktpa• 1 in Bratislava – 200 ktpa

STEAM CRACKER UNITS

DID YOU KNOW? LDPE units operate at extremely high pressure: 2-3000 bar MARKET

MARKET

MARKET

MARKET

ETHYLENE STORAGE

PROPYLENE STORAGE

C4

PROPYLENE

• TVK and Slovnaft together are the biggest plastic raw materials producers in the CEE region

• The NEW LPDE Plant – 220 ktpa unit at Slovnaft will increase ethylene and petchem feedstock demand

• Sales offices operate in seven countries: Germany, Poland, Italy, France, Austria, Romania and Ukraine

• Current annual feedstock transfer of 1.9 MT from Refining to Petrochemicals…

• …and 0.45 MT from Petrochemicals to Refining• MOL Refinery crude supplies are ensured

by pipelines from Russia and from the Adriatic sea as the alternative

INTEGRATED PETROCHEMICALS UNITS

SYNTHETIC RUBBER• One car tyre is usually made of 30-40

components, including 10-15 types of rubber with different compositions

DID YOU KNOW? 1 million tons of polymer were produced in 2013

SN PetChem

TVKH

SK

SOLD ETHYLENE

ETHYLENE

MOL GROUPPETROCHEMICALS UNITS

NAPHTHA

28problem solving problem solving

THOUSANDS OF IDEAS: EIFFEL AND ÖTRSince 2008, employees have submitted 3,000+ ideas in the EIFFEL Downstream Program, which have contributed nearly EUR 38 million to Downstream's efficiency improvements. In 1998, TVK launched the Ideas Support System (ÖTR), which sometimes resulted in savings of hundreds of thousands of euros.

he EIFFEL Program is Downstream’s Group-level employee idea management system.

Its goals are firstly to further sup-port efficiency improvements and employee motivation through innovations generated and submit-ted by employees and secondly to provide an incentive to strengthen a cost-awareness mentality. The Program was launched in 2009 and, since then, several subsidiaries have joined the initiative, in addition to MOL and Slovnaft Downstream.The purpose of the TVK ÖTR Pro-gram is to encourage employees to generate novel and advanta-geous solutions to resolve various technical, safety and administrative problems. ÖTR follows up and monitors employee ideas from submission through implementation to post-appraisal. If the implementa-tion of an idea results in financial savings then the idea originator is recognised financially through the EIFFEL Program and at TVK through the ÖTR Program. EIFFEL Idea (MOL – Supply & Sales/DSD/Refining)Title: Improving capacity utilisation in micro wax (BSLO) processing and solvent de-waxing in the MEK plant and micro-hydro-generation in the MIH plantsIdea generators: PÉTER GYÖRKÖS & VIKTOR GYŐRI

Contributors: TERÉZ BACSURNÉ KURUCZ,

LÁSZLÓ DÁVID, ATTILA HORPÁCSI,

ERNŐ TÓTH , TIBOR ZÁSZLÓS

One use of micro wax is as a food industry feedstock. In 2009, the lead-ing producer asked to buy significant quantities of two types of micro wax. We had no such feedstock so we had to buy-in the required amounts. We analysed the requirements and our ideas people met Refining to explore likely sources. Then, successful pilot production started in cooperation with DS Development, Refining and Controlling, contracts were signed and, in 2013, we successfully processed 630 tons realising ~EUR 65,000 net profit. In 2014, we will sell 2kt of these three products to realise for EUR 206,000. Since we have heard our main competitor, Shell, will stop base oil production at the end of 2015, demand for our products will grow. Our maximum possible output of 15kt could produce a profit of EUR 1 million per annum.

EIFFEL Idea (MOL-LUB)Title: Improving use of RALOX production equipmentIdea generator: TIBOR KOVÁCS

(Refining foreman)To reduce energy consumption, indicators are a priority, particularly in the additive production plant, so the opportunity to introduce higher charge size emerged when various options were analysed using existing RALOX plant equipment. R-7/1

reactor equipment was analysed and production difficulties were found, potentially arising from in-creased charge size, which could be manually monitored by re-installing the sight glass method, which is critical because the foam phase that might emerge during reaction can be swiftly detected. Thus the exist-ing service can maintain production. The idea could produce HUF 3.5 million in savings per year.

EIFFEL Idea (SLOVNAFT, a.s. – SCM)Title: Loading heating oil on to barges in Port BratislavaIdea generator: KARIN TÓTHOVÁ

(Supply & Distribution Planning Expert)

Heating oil sold by MOL and B7 quality diesel by Slovnaft used to go to the same Austrian market, but B7 production was more expensive at Slovnaft. How could we change this to meet customer requirements if there were a problem with MOL’s heating oil supply? As a first step, we decided to sell normal diesel as heating oil using road tanker cars (RTCs), to reduce logistics costs. After selling the first 14kt in January 2010, we distributed heating oil as a norm.We met Commercial & Logistics and decided to use barges which meant higher savings. A pilot barge load to Korneuburg was successful. Today we ship B7 die-sel, heating oil, normal quality and Slovak quality, in barges. We now produce original heating oil qual-ity and save valuable components. The 5-year average benefit is EUR 4.3m.

ÖTR Idea (TVK)Title: Reducing hydrocarbon lossin the PE-1/HDPE-1 plant – alreadyimplementedIdea generator: JÁNOS OROSZ

(PE-1 unit system operator)Hydrocarbons accumulate in thePE-1/HDPE-1 Plant feed prepara-tion section regeneration nitrogen pipeline when it is out of use, due to a lack of tight hydrocarbon valves. In the past a 2" connecting pipe was installed between this nitrogen pipe and a flare pipe for the de-pressurization of the system. This earlier modification solves the over-pressurizing problem, but causes a monthly loss of roughly 2 tons of

ethylene and 6 tons of isobutene. The idea was simple. Feed this accu-mulated hydrocarbon mixture back into the solvent recovery unit using a simple cross-connection between this nitrogen pipeline and and the inlet line of the guard filter of the flash gas compressors. In this way, the hydrocarbons can be reco-vered and reused. The ethylene fraction is sent back to the Cracker as vent gas and the recovered isobutene is re-used in the plant. The estimated project cost totalled EUR 8,700 and EUR 83,000 can be achieved in annual savings, with a ROI of less than 2 months.

Join the program now, we are counting on your ideas as well - contact your local coordinator!

TIBOR ZÁSZLÓS PROCESS TECHNOLOGY EXPERT

VIKTOR GYŐRI GROUP FUEL PRODUCTS SALES REPRESENTATIVE

LÁSZLÓ DÁVID REFINING OPERATIONS SUPERVISOR

PÉTER GYÖRKÖS GROUP FUEL PRODUCTS SALES REPRESENTATIVE

TERÉZ BACSURNÉ KURUCZ DS DEVELOPMENT & PRODUCT DEVELOPMENT ENGINEER

ERNŐ TÓTH BASE OIL AND WAX PRODUCTION MOL MANAGER


DS efficiency Millions savedEvery idea counts – EIFFEL & ÖTR

MOL Group Panorama – The Internal Magazine of MOL GroupPublished quarterly . Magazine Founder: MOL Group Corporate Communications . Executive Publisher: Dominic Köfner, Vice President - MOL Group Corporate Communications . Magazine Manager: Aranka Kiss . Managing Editors: Anna Hőgyész, Árpád Lipcsei, Virág Váraljai . Contributors: MOL Group HQ Editorial Board, Flagship and Operating Company Representatives . Publisher: HG Media – 1016 Budapest, Lisznyai u. 38. . Design: HG Media, Tamás Tárczy . Photos: Fotógyár English Editor: Jeremy Lovitt-Danks

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MOL GROUP

PETROCHEMICALS›

reFIneryOleFIn unItSldpe unItShdpe unItS

pp unItbutadIene unIt

SynthetIc rubber plantlOgIStIcS

this edition: petrochemicals

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MOl Group Petrochemicals in numbers

1,600

1.2m tons3 olefin plants and 8 polymer

units with of combined polyethylene/polypropylene capacity

Germany, Poland, Italy, France, Austria, Romania and Ukraine

5Global market presence, with sales to nearly

1.9MT

MOL GROUP PETROCHEMICALS IS

ONE OF EUROPE’S

TOP10PRODUCERS

2PETROCHEMICALS SITES

countries from Mexico to China

COORDINATED SALES, MARKET-ING AND LOGISTICS ACTIVITIES:

customers in 10 market segments, from Auto- motive to Packaging

Sales offices operating in seven countries

PROCESSING REFINED PRODUCTS

New investments:butadIene plant 130

commercial operations since May 2015

KTPA UNIT

SYNTHETIC RUBBER

60KTPA UNIT

operations planned from 2017 – implemented with experienced global partner Japanese Synthetic Rubber (JSR)

New LDPE

220KTPA UNITat Slovnaft will increase Petchem feedstock demand

October 2014 5

welcome

DEAR MOL GROUP COLLEAGUES AND MGP READERS,

In this edition, MGP explores MOL Group Petrochemicals, an important pillar of the Downstream value chain. Don’t forget, dozens of items we use in our everyday lives at home, outside and in the office are made from Petrochemicals, so this is a vital area of our business that affects everyone personally.

Over the last ten years, this area of our operations has also had to contend with decidedly adverse market conditions. Last year, however, Petrochemicals was in a position to report significantly improved results.

The last two years were very busy for Petrochemicals. Let me give you two key examples: the Integration of Slovnaft Petrochemicals, s.r.o., into SLOVNAFT, a.s., as of 1 January 2013 and the successful recommissioning of the TVK LPDE-2 plant in Hungary. In addition, this year will be entirely taken up with increasing efficiency, a core task, all in accordance with targets set by the New Downstream program.

I’ve purposely left something that I’m most proud of to the end of this list: the success stories that set an example to all of us and clearly show how MOL Group will have to operate in the future. I’m sure everyone already knows what I’m talking about! I’m referring, of course, to our recent investments in Slovakia and Hungary. Our new petrochemicals assets – the Slovnaft LPDE-4 unit, the TVK butadiene extraction unit and our Synthetic Rubber plant, where we took a significant step forward beyond butadiene and expanded the value chain – represent new approaches to the way we operate, that is to say proactively, responsibly and by adding real value. We are only just beginning, but we are on the right track.

So come with me and explore the world of MOL Group Petrochemicals. MGP, as usual, provides all the interesting details you need to know about!

Enjoy a good read!

Zsolt hernádichairman & ceO

EXTENDING THE VALUE CHAINinterview

MOL Group is strengthening its Petrochemicals segment with significant investments in Bratislava and Tiszaújváros. New workplaces will be created in the Group and among our suppliers too. While the Group expects considerable improvement in its position in the petrochemicals marketplace. Sándor Fasimon, COO – MOL Hungary and Oszkár Világi, Chairman of the Board and CEO – Slovnaft, gave fascinating answers to our questions.

interview

he Petrochemicals field is an important pillar of Group Downstream, processing a large amount of refinery products. How

will recent investments by MOL Group change the value chain?Sándor Fasimon: In line with our strategy, these recent investments will extend our value chain, which today is fully integrated, from crude oil through to plastics. Due to the lack of lighter gas feedstock in Central Europe, MOL Group’s petrochemicals business consumes a mixed feedstock of naphtha, LPG and gas oil. This enables us to obtain heavier ethylene by-products. Significant investments have begun in both Bratislava and Tiszaújváros. At our site in the Slovakian capital, we’re modernising the LDPE product line with a new, state-of-the-art LDPE-4 unit, and we’re constructing a Butadiene Extraction/Synthetic Rubber (SBR) plant in Eastern Hungary. These steps will significantly strengthen MOL Group’s Petrochemicals segment. I firmly believe that we made the right decisions at the right time because these strategic moves will help us weather the stormy waters of the European Downstream business.Oszkár Világi: Long ago, refineries only processed crude oil, but fifty years ago production was expanded to include plastics. At Slovnaft, both these products are closely linked technologically and economically and our objective is to develop them even further. Ten years ago, we launched a new polypropylene production line, and today we’re building a new LDPE4 plant to produce polyethylene. Once it’s completed, sometime in late 2015 or early 2016, our production capacity will rise and we should be able to produce new types of polyethylene with better properties.

From the business viewpoint, this will bring new markets and customers, so that we fully expect to be among the absolute top companies in Europe in this field.

How does Petrochemicals affect Downstream’s generally unfavourable external environment? Will these new investments bear fruit?Sándor Fasimon: Due to this year’s results and short-term analyst forecasts, we look towards the future with cautious optimism. Butadiene prices are expected to rise from their current, relatively low levels. As a consequence, Butadiene production profitability will be restored to the level that made it an attractive investment option in the first place. As for LDPE4, we hope efficient operations will allow us to recoup investment expenditures from the very beginning through reduced production costs. Oszkár Világi: The new plastics production LDPE4 unit isn’t just about profit, it’s about re-placing obsolete equipment with something more up-to-date. At the same time, it addresses production diversification at Slovnaft, thus underpinning Upstream opera-tions that would otherwise not be justified. The global market for plastics is growing, so we believe this investment will contribute in the future, not only to Slovnaft’s figures, but also to those of MOL Group as a whole.

Are new Petrochemicals operations having any positive impact on employment in the CEE region?Sándor Fasimon: I’d say that Petrochemicals is a job creation engine. Through 2017, we’ll hire more than 130 new colleagues at our sites and the impact on our suppliers will be even more significant. We expect to create more than 600 new jobs during this period. Looking at it from a distance, petrochemicals

feedstock materials like butadiene will also help other industry players such as rubber production companies and that’ll move the broader economy forward.Oszkár Világi: By investing in LDPE4, we are demonstrating that we are a responsible employer, striving to ensure optimal employment both at Slovnaft and MOL Group into the future. The employees who will be operating this cutting-edge

technology will gain vital new skills and fresh technical knowledge, since LDPE4 is based on modern tubular technology that enables the manufacturing of about 30 kinds of polyethylene. Those not working at the new unit will still get similar opportunities in other production areas. Of course, a number of contractors are going to be working on the construction of the unit, again to the benefit of employment in the region.

In which areas are there synergies between Petrochemicals and Downstream’s other activities that can be exploited? Sándor Fasimon: There are many interesting intermediate chemicals along the propylene value chain that are currently being revised and may prove attractive. However, we wouldn’t enter any derivative business until the corresponding end-product markets appear to be more promising on the strategic

T

SáNDOR FASIMON

OSzkáR VILáGI

The global market for plastics is growing, so we believe this investment will contribute in the future, not only to Slovnaft’s figures, but also to those of MOL Group as a whole.

Through 2017, we’ll hire more than 130 new colleagues at our sites and the impact on our suppliers will be even more significant. We expect to create more than 600 new jobs during this period.

OSZ

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interview interview

horizon. Shifting Petchem feedstock, mostly naphtha, towards lighter composition is another possibility. As for raw materials for olefin production, there might be options other than steam cracking, some of which could significantly affect Downstream. However, an examination of such options will need to proceed with particular caution.Oszkár Világi: There’s going to be genuine synergy, particularly when maximising materials and energy flow interfaces between Downstream and Petrochemicals. This will let us stand on our own two feet. The mere existence of Petrochemicals adds flexibility to the whole system. What all this means is that both pillars of our activities are going to bring the Group even more financial stability. If either part slows down, the other will help compensate for fluctuations. Don’t forget that there are products we both consume and produce. Synergy shows that if we didn’t have Petrochemicals, we would have to buy part of our production in the market place.

How will Petrochemicals contribute to the success of the New Downstream Program?Sándor Fasimon: TVK ensures continuous developments by placing a strong emphasis on effective New Downstream Program management. Steady idea generation has resulted in approximately 40 action plans being registered in the program and – due to the Idea Support System – many valuable ideas have also been submitted by employees. With well-disciplined execu-tion, these actions will generate USD 32 million, a newly-revised target, by the end of 2014. Our vision for the future is to con-tinue these excellent practices during the next Downstream Program, thus increasing the competitiveness of Petrochemicals. In addition, through successfully cooperating with the world’s leading Japanese petro-chemicals company, JSR, we’ve got a great opportunity to deepen our knowledge in this area, thus increasing our competitiveness. Oszkár Világi: I see the new technology’s eco-nomic value deriving from a decrease in input materials and lower energy consumption by about 5%. After raw materials, energy is the Group’s greatest expense. On the other hand, this investment also has ecological aspects – emissions and the negative impact on the environment are reduced.

What about “old” assets? Are there any efficiency or modernisation programs in the works?

Sándor Fasimon: When thinking about petrochemicals developments, we must always bear in mind the capital intensity of this industry. If modernising an existing older plant requires considerably less capital investment than building a new unit, then renovations are much more cost-efficient. However, product competitiveness must be the deciding factor for a revamp – improved unit cost hardly compensates for disappear-ing demand or declining price levels.In the case of polymer units, this is a major concern at TVK, since Slovnaft is already on the way to having two mod-ern, competitive-scale units, the PP-3 and the LDPE-4. At TVK, we will face tough

strategic decisions in the coming years. As for the olefin plants, any modernisa-tion must aim to improve profitability through modified feedstock composition and reduced energy consumption. Since these units play a key role in Refinery/Petchem integration, evaluation of the feasibility and economics of any major change will require intensive study.Oszkár Világi: An essential component of the entire process is the extensive renovation of our Steam Cracker, which was built 40 years ago! The cost of upgrading appears to be roughly EUR 40 million. This investment is vitally necessary since ethylene, the raw material produced by the Steam Cracker

Unit, is a key element for future LDPE4 unit production. Besides ethylene, the Steam Cracker will produce other products for the Group such as propylene, benzene, while C4 mixture will be processed by the new butadiene unit of TVK – giving an example of multi-site petchem integration.

We have all heard about LEAN – how is Petrochemicals taking its philosophy on board and how can it be applied to its processes?Sándor Fasimon: LEAN offers a new approach to daily operations by eliminating non-valuable activities so as to make our work culture more efficient. Our colleagues

have taken part in the Danube Refinery LEAN program to become acquainted with best MOL Group practices and to increase the success of the first wave at Tiszaújváros. Through LEAN lenses and fresh minds, three working streams were launched to generate bottom-up ideas. With the involvement of blue-collar experts, 49 ideas were identified, 90% of which have been implemented. The LEAN philosophy has been firmly planted in the minds of our colleagues to ensure continuous improvement and to challenge all of our current practices all the time.Oszkár Világi: At Slovnaft we have incorporated LEAN in our everyday lives and over the past two years

we have acted on over 400 ideas for improvement. Petrochemicals is no exception. Processes have been effectively put in place to help us start up LDPE4. As part of LEAN, we are dedicating ourselves to obtaining improved efficiency and better shift worker multi-functionality at the Steam Cracker, while simultaneously streamlining the processing of work permits, at the same time. The Steam Cracker is at the heart of Petrochemicals and we should therefore be operating it in tip-top shape. The next LEAN wave is going to focus on better use of energy and output at the Steam Cracker.

How can MOL Group Petrochemicals compete in light of international trends and challenges? Sándor Fasimon: On the sales side, we’ll definitely have a very competitive product portfolio, especially of film grades, the introduction of which will be supported by extensive pre-sales marketing. If market analyses are reliable, the European LDPE field is the least threatened by competition from imports. Further penetration of LDPE grades into film applications will certainly create significant market opportunities. Having high quality products is definitely an advantage from this viewpoint. The MOL Group Polymers area is also very competitive in the level of service provided and in its knowledge of CEE markets. In the latest customer satisfaction surveys, we found that price isn’t the only important factor for our customers when choosing a supplier. Availability and quality of materials are as important as price or even more important. Since we can’t be competitive on the cost-side versus Middle East polymer producers, we have to focus on the above-mentioned areas.Oszkár Világi: As I have already mentioned, Downstream in our Group is based on two pillars. The plastic business’s economic performance is currently weaker, but we firmly believe it’s going to improve. The petrochemicals market is exposed to the global impact of Asian and North American producers. However, we have a competitive advantage here at home having served our customers for many years and knowing their requirements intimately. Modernising our polyethylene production lines and constructing new ones such as the butadiene unit will permit us to continue to offer our customers affordable products. That is why we are investing in the coming decades.

OSzkáR VILáGIIn March 2006, Oszkár Világi was appointed CEO of Slovnaft. Today he is Chairman of the Slovnaft Board of Directors and a Member of MOL Group’s Executive Board, as well as being a Member of the MOL Plc. Board of Directors since 1 May, 2011. He is also a Member of the INA d.d. Supervisory Board. In 1992, he was co-founder of the Csekes, Világi, Drgonec & Partners law practice. In 1990-1992, he was a Member of the Czechoslovakian Parliament. From 1996, he was a member of the supervisory and governing bodies of several leading Slovakian companies. Oszkár Világi graduated from the Commenius University Faculty of Law, Bratislava and received his Doctorate in Law (JUDr.) in 1991. He was legal advisor to foreign investors in major Slovakian industrial restructuring projects before joining MOL Group.

Petrochemicals feedstock materials like butadiene will also help other industry players such as rubber production companies and that’ll move the broader economy forward.

There’s going to be genuine synergy, particularly when maximising materials and energy flow interfaces between Downstream and Petrochemicals. This will let us stand on our own two feet.

SáNDOR FASIMONSince October 2012, Sándor Fasimon has been Chief Operating Officer of MOL Hungary. In 2005-2006, Sándor, apart from managing the Gas & Power Division, acted as Head of Upstream Portfolio Development and was then promoted to manage MOL’s activities in Russia. From July 2009, he was Senior Vice President – Supply & Trading, where he was responsible for MOL Group crude oil supplies, development of the energy portfolio, trading platform operations, as well as for natural gas and energy trading. As Executive Vice President – Exploration & Production, he has been a member of the MOL Group Executive Board since June 2011 and also continues to be so in his new position. Sándor Fasimon is the Chairman-CEO’s special envoy to CIS and the Middle East.


PETROCHEMICALS


infographics

October 2014 11

infographics

THE SCIENCE BEHIND

SOLD

PR

OP

YLE

NE

SOLD BUTADIENE

LDPE PLANT

HDPE PLANT

BUTADIENE PLANT (2015)

SYNTHETIC RUBBER PLANT (2017)

POLYPROPYLENE PLANT

REFINERY

STEAM CRACkER UNIT

PROPYLENE

LPG

GASOIL

PURCHASED PROPYLENE

DiD yOu knOw? In 1975, Steam Cracker Units in both Slovnaft and TVK started operations

• 1999 – MOL acquires its first TVK shares• 2000 – MOL becomes majority TVK

shareholder with a 33.34% + stake• 2004 – TVK is integrated into MOL Group – MOL acquires majority stake in Slovnaft – The Petrochemicals Business Unit is established• 2007 – MOL acquires a majority stake

in TVK of 94.86%• 2011 – Petrochemicals Business Unit is

integrated into the Downstream Division• 2013 – The foundation stone is laid for

an LPDE4 polyethylene production unit in Bratislava, Slovakia

– The foundation stone is laid for a Butadiene Plant in Tiszaújváros, Hungary

MILESTONES IN PETROCHEMICALS HISTORY

DiD yOu knOw? Steam Cracker Units......highest temperature: +850 °C ...lowest temperature: -150 °C ...temperature difference: 1,000 °C

• 2 in Tiszaújváros – 660 ktpa• 1 in Bratislava – 200 ktpa

STEAM CRACKER UNITS

DiD yOu knOw? LDPE units operate at extremely high pressure: 2-3000 bar MARkET

MARkET

MARkET

MARkET

ETHYLENE STORAGE

PROPYLENE STORAGE

C4

PROPYLENE

• TVK and Slovnaft together are the biggest plastic raw materials producers in the CEE region

• The NEW LPDE Plant – 220 ktpa unit at Slovnaft will increase ethylene and petchem feedstock demand

• Sales offices operate in seven countries: Germany, Poland, Italy, France, Austria, Romania and Ukraine

• Current annual feedstock transfer of 1.9 MT from Refining to Petrochemicals…

• …and 0.45 MT from Petrochemicals to Refining• MOL Refinery crude supplies are ensured

by pipelines from Russia and from the Adriatic sea as the alternative

INTEGRATED PETROCHEMICALS UNITS

SYNTHETIC RUBBER• One car tyre is usually made of 30-40

components, including 10-15 types of rubber with different compositions

DiD yOu knOw? 1 million tons of polymer were produced in 2013

SN PetChem

TVKh

Sk

SOLD ETHYLENE

ETHYLENE

MOL GROUPPETROCHEMICALS UNITS

NAPHTHA

insider insider

October 2014 13

MANAGING THE SUPPLY CHAIN There is only one single value-creating process in Downstream: taking crude and converting its hydrocarbon molecules into products like diesel, gasoline, propylene, bitumen, etc. and then delivering them to customers.

o manage this process properly and maximize profitability in the short, middle and long terms,

the operations of 6 production plants with more than 80 units, 25 terminals and 5,000 rail tanker cars and the work of ca. 10,000 employees all need to be harmon-ised to meet the requirements of 30,000 customers in 12 countries. In this grand game, some 80-90 people in global and local SCM teams work to prepare, year by year, month by month, the best possible Business and Rolling Plans and to design, week by week, day by day, the best possible schedules to make MOL Group Downstream operations

run like a Swiss watch, or even a bit better! One of the most crucial ele-ments of our DS activities is to have real market-driven operations. Since demand growth has disappeared and production costs are steadily increasing, it is critical to streamline supplies to customers, to listen very carefully to their requirements or to even predict their requirements.That is why product line manage-ment was introduced to maximize earnings all along the product stream and to minimise resources used including assets, inventory, and human and financial resources. They optimize a particular product stream to obtain the shortest route and time to the customer.

INVENTORY ‘14 PROGRAM

• Review internal process and roll-out actions to find optimum inventory levels

• Define challenging average inventory levels for each MOL Group companies

• Inventory value in January-July 2014 was USD 290m lower compared to the same period in 2011, thanks to lower inventory by 344 kt

Did you know?

By handling approximately 16,000 pieces of data and creating a matrix with 45,000 columns and 40,000 rows, PIMS, the general tool of Group SCM, sets operational targets for the next Rolling Plan period.

16,000The molecules of one of our most attractive products diesel, “travel” within the MOL Group system. The fastest ones spend less than a week in transit, but the slowest ones sometimes hang around for up to four months.

1 week vs 4 monthsThis is the basic mathematical formula of PIMS upon which the whole of MOL Group

optimization is based. The ‘F’ function, the difference between income from products sold and the costs of products purchased and product manipulation, has to be maximised.

F = SV * SP – (PV * PP + CostProdLog)

STEFANO FORTE DIRECTOR – INA SCM

BRANISLAV VINTER MANAGER – GROUP DISTRIBUTION

& SCHEDULING

zUzANA SPANOVA SENIOR ExPERT – GROUP SCM PLANNING & OPTIMIZATION

BéLA kELEMEN SVP – GROUP SUPPLy CHAIN MANAGEMENT

PETER ŠRáMEk DIRECTOR – SLOVNAFT SCM

kRISzTINA PETRéNYINé SzABó MANAGER – GROUP PETCHEM PRODUCT LINE

TAMáS SzABó MANAGER – GROUP WHITE

PRODUCT LINE RóBERT MWASARU MANAGER – GROUP SCM PLANNING & OPTIMIZATION

zOLTáN SzABó HEAD – MOL HUNGARy SCM

SzABOLCS VIDA MANAGER – GROUP LUB PRODUCT LINE

ISTVáN PéTER MANAGER – GROUP BLACK PRODUCT LINE


Inventory is generally a symptom of poorly managed processes

THE 3 PILLARS OF BUSINESS OPERATIONS

peOplehighly knowledge-able, globally think-ing and experienced

colleagues, PIMS experts

Keep the balance between all 3 pillars

the vOIce OFcuStOmer

tOOlSPIMS, ORION, NICE

prOceSSRolling Planning, Business Planning,

Strategic Planning, Scheduling, Inventory Management

MORE FROM LESS

Plastic is light as a feather but stronger than steel. Around 50% of an average car is plastic engineering materials by volume, jumping to almost 90% for race cars.

90%

LM

CCONGRATULATIONS TO ALL GCC PARTICIPANTS!

The 100-day Global Corporate Challenge team competition is over. With its daily average of 14,705 steps, MOL Group performed above the industry average of 12,937 steps and remained among the most highly active companies all the way. This is thanks to the remarkable

number of MOL Group participants.Collectively, colleagues went a total distance of 730,191 km.

This equates to walking around the world 18.22 times whilst burning off a total 191,675,013 kJ of energy. The above results reflect great

steps towards more active and healthier lifestyles for all. Let’s keep up the good work during the individual challenge as well!

MMOL GROUP FURTHER STRENGTHENS ITS RETAIL

POSITION IN THE CzECH REPUBLIC

MOL Group has entered into an agreement with LUKOIL for the purchase of LUKOIL’s retail network in the Czech Republic.

LUKOIL’s network consists of 44 service stations with countrywide coverage, high average fuel sales per station and a strong

non-fuels business. Through this acquisition and the recently announced purchase of the ENI network, MOL Group will own 318

stations in the Czech Republic and firmly establish itself as one of the leading motor fuel retailers in the country. This will significantly

strengthen the Group’s position in the Czech Republic and contribute to delivering the Downstream strategy of increasing retail presence within the supply radii of its core refineries. Lars

Höglund, Senior Vice President – MOL Group Retail observed: “This acquisition is an important step in further strengthening

our presence in the Czech marketplace and our strategic target of being a leading player in the CEE region. We are committed to continuously improving our offer to our customers by delivering

the best possible products and services at our stations.”

MOL SLOVENIJA OPENED ITS 34TH SERVICE STATION On 1 July, MOL Slovenija opened its 34th service station – MOL Rožna Dolina in Nova Gorica. The new station covers 642m² and includes a shop, LPG and carwash. MOL Slovenija now operates 34 service stations in the country.

FIRST GROUP-LEVEL OHS REPORT PUBLISHED The 2013 Group Operational Health & Safety (OHS) report has been published in line with international industry standards. The intention here is to provide an overview of last year’s performance and act as a benchmark for our competitors. Despite all efforts so far, we still have a long way to go to improve our health & safety performance.

NEW MOL GROUP SCIENTIFIC MAGAZINEThe magazine is designed to share information related to the oil and gas industry and report on global world economic issues and long-term technological and economic trends. The latest issue features EU-level topics, as well as MOL Group development activities, best practices and processes.

OUTLOOK WEB ACCESS (OWA) IS SET AS DEFAULT FOR EVERY USER OWA permits one to reach one’s Outlook (e-mail) account from any external device or location, e.g. from home computers or internet cafés through a simple web browser with no VPN connection.

MOL GROUP STYLE GUIDE The aim of the MOL Group Style Guide is to ensure that we share a common platform of corporate culture, etiquette and language. This publication instructs all MOL Group employees in how best to communicate within the organisation, as well as externally, thus representing MOL Group in a uniform way.

SUMMER INTERNSHIP AT SLOVNAFT12 students from the Slovak Technical University took part in internship programs at Slovnaft. They then presented their work to refinery management and the university, based on their experiences and fresh knowledge gained. The five best students will receive scholarships and be selected for Growww based on feedback from the trainers, university grade point averages and their desire to be employed at Slovnaft after graduation.

News in brief

MMOL GROUP DISPATCHES SECOND SHIPMENT OF RELIEF AID TO NORTH WAzIRISTAN, PAkISTAN MOL Pakistan Oil & Gas Company, a MOL Group subsidiary, has put together seven truckloads of food parcels, which were presented by Alexander Dodds, EVP – Group E&P to Khaqan Abbasi, Minister of Petroleum & Natural Resources and Abid Saeed, Federal Secretary. These relief goods meet the needs of 1,000 internally displaced (IDP) families for a week. MOL Pakistan, presently working in the TAL Block which consists of the districts of Karak, Kohat and Hangu, actively supports Pakistani people in need.

THE JOURNEY CONTINUES!

gettheworldmoving.com

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We’re still here for you…

SSTART OF PRODUCTION IN THE IzABELA FIELD INA and Edison International S.p.A. started production in the North Adriatic Izabela field in July, after having resolved the last remaining issues and thus meeting all preconditions for commencing gas exploitation. The Izabela gas field is located 60 km off Pula. Total gas reserves are estimated at about 1.4 billion m³, with an expected production of approximately 280 million m³ per year. Two production platforms have been installed at a depth of 37 metres. Gas will be transported to the Ivana A and Ivana K platforms, also located in the North Adriatic, where it will be further processed and compressed and then released into transmission systems going to Croatia and Italy.

MOL GROUP AGREES TO AkRI-BIJEEL FIELD DEVELOPMENT

PLAN WITH THE kURDISH MINISTRY MOL Kalegran, operator of the Akri-Bijeel block, has agreed its field development plan with the Kurdish Ministry of Natural Resources. The Field Development Plan

(FDP) covers commercial discoveries in the Akri-Bijeel block, as well as the Bijell and the Bakrman areas. Total block production is expected to increase to a minimum

of 50 mboepd by 2017-18. MOL Kalegran is a 100 % MOL Group subsidiary and has been an operator in Kurdistan since 2007.

LEAN enters the 7th phase at SlovnaftIn September Slovnaft entered the 7th LEAN phase in the SCM depart-ment – a revamping of the ethylene plant, electricity distribution and energy supply. Attention will also be paid to sustainability and trai-ning of new staff members entering the GROWWW program. LEAN has already passed the sixth phase, which focused on dry runs. Overall, it was attended by 524 employees and developed 130 new ideas and improvements, out of which about 50 have been implemented to date.

14 MOL GROUP Panorama October 2014 15 14 MOL GROUP Panorama

group newsgroup news

in focus

BEHIND THE LETTERS EWC

in review

What is the European Works Council and what is it for? A brief explanation.

Ernő BakoS CHAIRMAN – MOL GROUP EWC

LEGISLATIVE BACKGROUNDThe establishment of the European Works Council (EWC) was ordained by a European Parliament and Council Directive and has thus entered into EU member state legislation. The Hungarian act governs multinational companies with headquarters in Hungary and thus includes MOL Group. The aim of the EWC is to inform and consult employees on all employment-related issues on an international scale.

STRUCTUREThe EWC has 25 ordinary members representing the countries in which MOL Group has a company employing at least 100 people. In the Council there are 9 Croatians, 8 Hungarians, 4 Slovakians, 1 Austrian, 1 Italian, 1 Romanian, 1 Slovenian and a Serbian observer. Almost 100% of EWC members are trade unionised and the Council has five female members, which is less in proportion to the total number of female Group employees. The EWC’s governing body is the Executive Committee with a chairman, the two vice-chairmen and an executive member.

ACTIVITIESThe MOL Group European Works Council was established in 2004. Its activities – the practice of informing and consulting employees – are implemented through an annual general meeting in Hungary, employee forums, consultative meetings to inform people on current issues and consultation on any given topic with the relevant senior managers. The Executive Committee generally meets monthly, discusses current issues and regularly visits MOL Group companies in EU member states so as to maintain direct relationships with a wide range of employees, to listen to their opinions and remarks.

Actively cooperates with different committees such as the MOL Group Ethics Council, the MOL Group HAY Committee, etc., so as to track fair treatment of employee rights and also takes an active part in labour relationship development.

Provides training for its members and occasionally members from one or more other countries participate in training sessions.

Maintains close international relationships with European trade unions and holds consultations that are also open to trade union representatives, active in MOL Group.

Communications channels are direct meetings with members, electronic correspondence, telephone conversations, company

and trade union press and the www.mos/sites/eut intranet page.

The way of cooperation

The aim of the EWC is to inform and consult employees on all employment-related issues on an international scale.

The level of control and support exercised by functions needs to be aligned with the aspirations of the businesses.

Fast Forward will optimise the operating model of Functional Units so that they best support value creation of our businesses.

DR. BERISLAV GAŠO FAST FORWARD PROGRAM DIRECTORSVP – GROUP CONTROLLING, ACCOUNTING & TAx

e launched a Group-wide program called Fast Forward in July 2014 with the

aim of enhancing cooperation between MOL Group’s Functional and Business Units and to increase the balance of the organisation between Group and Flagships. Our primary goal is to care-fully analyse MOL Group supporting function processes and improve these to the greatest possible extent.

The key to a successful and profitable organisation is that the level of control and support exercised by functions needs to be aligned with the aspirations of the businesses. MOL Group has several business excellence initiatives that require an operating model in which Functional Units can best enable value-creation in our businesses. Therefore, with Fast Forward, we aim to find the answers to a number of pressing questions about business criticality, quality, quantity and the efficiency of our functional processes. There is always room to further streamline and simplify these

and to review the nice-to-have and control parts of our activities. This, in turn, could help us further clarify accountabilities and then design and set up the right structures necessary for process optimisation.

Fast Forward’s success lies in the effective cooperation and team work of our colleagues across functions and

businesses, Group and Flagships. It is our experts and leaders who own supporting function processes which makes their engagement crucial. We will not only consult them but will also include both the functional and business perspectives so as to validate any proposed alignments and we invite all our colleagues to speak up and contribute their suggestions.

W

STRUCTURES & PROCESSESFOR

TOMORROW


conference conference

THE LARGEST OIL GATHERING, 2014 The World Petroleum Council (WPC) held its 21st Congress in Moscow between 15 and 19 June this year. MOL Group played an active role in the Congress. On the first day, József Molnár, Group CEO gave the keynote address on the topic of “Sustainable financing of the industry”.

ey trends affecting MOL Group call for a disciplined approach to finance and funding. “Over the last few years we’ve seized a number of opportuni-

ties and met a number of challenges. To sum up briefly, our Petchem business has moved into a very profitable phase in spite of an unfriendly environment. Our Downstream business has remained a strong cash con-tributor to the Group. For our Exploration & Production arm, the Russian upstream market is a great place to invest in and we are actively looking for new opportunities here to meet our growth targets. We are already conduct-ing exploration efforts in our current assets and are very much looking forward to positive results. In the CEE Upstream, we maximize production and optimize cash in the short to middle terms, however we cannot change our nature as we experience a low single digit decline in resources every year. In addition, MOL Group has been further in-volved in a technical program whereby com-pany experts conduct research into potential solutions to the problems of overpressure and migration when drilling. We put in place a USD 500 million efficiency improvement program which already deliv-ered outstanding results in 2013. However, the Company has had to comply with much more stringent EU legislation on chemicals that is now in force and is poten-tially costly in HSE terms for oil and gas com-panies in Europe and beyond. In Gas & Power there are regulatory and market challenges. To achieve flexible development in regional Gas Midstream it is very important to invest at the right time, but this field is not a growth driver at the moment, while developments in the market place have killed off the Energy Venture concept and our CCGT projects. We are now focusing on value creation over

k

volume growth, targeting a balanced port-folio. We are moving forward with an active M&A strategy to enter a new league. Our key principles and goals are rigorous capital discipline, improving the portfolio’s overall risk profile, focused geographical diversifica-tion, establishment of new strategic partner-ships like Wintershall and TPAO, potential farm outs, perhaps partial and also possibly risk sharing and optimisation of project financing. A critical factor in successful M&A is talented human capital to revitalise staff and organisations, to select the right equip-ment, to manage integration, to resist ‘deal fever’ and to ensure financial readiness.”

József MolnárGroup CEO

WPC elects its first Hungarian presidentAt the 21st WPC congress, József Tóth was elected WPC President for the

next three years. The WPC holds its congress, hosted by one of its member countries, as the principal meeting place for the global discussion of oil and gas issues. Dr. Tóth has also served as Executive Chairman of the Board of the Olajterv Oil & Gas Engineering Group. He is the founder and current president of the Hungarian Petroleum Association and also helped to set up the Hungarian Strategic Petroleum Reserve.

Facts and figures about WPC • 1933The foundation of the World Petroleum Council (WPC)

• dialogueThe founders’ goal is to promote dialogue between rival parties

• goalTo facilitate sustainable supply and efficient consumption of oil and gas and other energy carriers for the benefit of the general public. It is the main forum of the global oil and gas industry

• 69The London-based international organisation has at present 69 member countries. OPEC and non-OPEC countries are members representing both national and independent oil companies

• participation In addition to oil companies, universities, research institutes and government agencies may also participate in national committees

• 3WPC Congresses are held every three years in a member country. The next meeting will be held in Istanbul, in 2017

October 2014 1918 MOL GROUP Panorama

I

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C

THE MOL RED EMPLOYEE CARD RENEWED The MOL RED employee card was launched 10 years ago. Its structure has been streamlined and updated several times over the past few years, but by far the greatest changes were introduced this September. The scope of benefits available to cardholders was enhanced and their basis also changed. Instead of nationwide standardised prices, employees will receive discounts on current gasoline or diesel prices prevailing at any given MOL service station. The RED card can be used at nearly 3,600 service stations in 10 countries to pay for motor fuel or motorway tolls, including the MOL network in Hungary, Slovenia, Serbia, Romania, Roth in Austria, Slovnaft in Slovakia, Slovnaft and PapOil in the Czech Republic, INA and Tifon in Croatia, Energopol in Bosnia-Herzegovina and the IP network in Italy.

FIRST BURGER KING IN CROATIA LOCATED AT TIFON SERVICE STATION AT DRAGANIĆ SOUTHTifon, recognised as a top brand in the Croatian marketplace, always strives to meet the needs of its customers with quality products and services. In July, the first BURGER KING in Croatia was opened at the Tifon service station in Draganić South, located on the motor-way between Zagreb and Karlovac.

ASSET-TEAM OPERATION IN TVK TVK has launched a new operation model, called ‘Asset’. Compared to a classic, functional organization, the Asset-team concept is a matrix type overlay to a functional organization, which has proven to provide much better cross-functional alignment and accountability for meeting the Production objectives. To obtain the proper perspective over the entire TVK Production, it is essential for Management to communicate the key and primary role of the Production, which is to operate and maintain the processing units flawlessly and maximize profitability through optimization and capacity creep. These Best Practices build on the concept of the Reliability and Maintenance Management System and the European Refinery Technical Support Study.

MOL ROMANIA CELEBRATES STYLE & ELAN MAGAZINE’S 10TH ANNIVERSARY In August, MOL Romania celebrated the 10th anniversary of its Style & Elan Magazine. For the occasion, through a new application, Style & Elan readers were invited to become editors and pre-pare their own individual front pages. The application is available on the MOL Romania website.

SLOVNAFT IS LAUNCHING SAPThe company is switching off its Oracle information system and launching SAP.This spring and summer, “GoLive”required focused work from Slovnaftemployees, MOL colleagues and IBMconsultants. SAP will bring Slovnaftbetter organization of work processes,more efficient work organization and,last but not least, financial benefits.

News in brief

INA’S SIGNIFICANT MODERNISATION PROGRAMDue to an intensive modernisation program, INA today operates 190 modernised service stations and is therefore by far the largest up-to-date network in Croatia. Following the success of the pilot phase, INA is continuing with the project and looking for new partners to manage the service stations. In the operational model, the company retains ownership of all retail assets including concessions, properties, buildings, infrastructure and goods while the entrepreneur manages these resources, as well as the service station team, for a fee, by agreement with INA. The Company continued intensive investments in the first six months which amounted to HRK 665 million. As in 2013, most of the investments went to upstream projects in Croatia, in which almost HRK 440 million were invested. For the first time in the past ten years, INA recorded an increase in crude oil production from domestic matured fields while an increase of 3% was recorded in total hydrocarbon production. With a further fall in net debt of 18% and by decreasing net gearing from 25.8% to 24.3%, compared to the first six months of 2013, the Group’s financial position was additionally improved.

CAMPAIGN FOR MOTOR FUEL QUALITY

This summer, Slovnaft created a new TV campaign aimed at Slovnaft fuel quality. In the campaign, with its motto

“Quality Drives Us Forward”, motorists were shown what Slovnaft’s role and responsibilities were throughout the entire process of research, manufacturing, distribution

and sales at our service stations. The campaign featured international staff and Slovnaft workers in shots of the

refinery. The TV campaign was supported by print, radio, the Internet and billboards. Whilst television showed

Slovnaft customers the way in which fuels go from the refinery to the service station, other media simply asked

consumers how to recognize fuel quality. The answer? By the logo, of course!

HHYDRAULIC GROUNDWATER PROTECTION Slovnaft Bratislava has invested almost EUR 100,000 this year to improve the unique hydraulic groundwater system that protects groundwater at Žitný ostrov from oil pollution. The restoration of the hydraulic curtain walls will take until 2020 to complete. “Despite the high complex-ity and cost, the recovery of hydraulic aperture walls is required for the com-plete protection of the unique drinking water reservoir. The hydraulic ground-water protection system, operated by Slovnaft, GEOtest Bratislava and VÚRUP, is being excellently managed,” added Milan Fillo, director of VÚRUP.

MMOL GROUP’S CONCEPT SERVICE STATION

WINS PRESTIGIOUS GREEN AWARD

A very special MOL Group service station has received the Energy Globe National Award (EGNA), presented by

Ambassador Wolfgang Waldner, Chargé d’Affaires at the Embassy of Austria to Hungary. The award-winning

service station in Istenhegyi utca was designed by Zsolt Zombori of Europa Studio Architecture in 2012.

This best-in-class service station even beats the efficiency of passive buildings and features a number

of clever solutions and non-typical industry standards, such as ecological walls and roof, thermal insulation

inside the building and a photovoltaic electrical system.

MOL ROMANIA: MORE THAN EUR 6MN IN NETWORK EXPANSION

MOL Romania has invested over EUR 6.1 million in 7 new service stations, thus extending its country-wide

presence to 154 units. The new stations are located in the counties of Constanta, Ilfov, Suceava, Timiș, Hunedoara, Iași and Bihor. “We are committed to

continuing our investment policy whilst always con-sidering market opportunities, expanding our service

station network and offering quality fuels to local customers, as well as those enjoying the benefits of

a strong regional network. Accordingly, since the be-ginning of the year, we have opened 11 new service

stations in Romania,” commented Kinga Daradics, CEO & Country Chairwoman – MOL Romania.

20 MOL GROUP Panorama October 2014 21 20 MOL GROUP Panorama

flagship newsflagship news

OL Group is about to launch two new HR programs as part of our efforts to en-hance organisational capa-

bility: Intensity for managers and UPPP for talented students and graduates in the field of geoscience and petroleum engineering. Why are these so impor-tant for MOL Group?Building organisational capability in areas such as leadership development and talent management is among the top priorities for any company. It takes the right skills and competencies of colleagues to make an organisation grow.

Intensity, similar to LEAD, is aimed at MOL managers. What is the difference?Intensity is, in certain aspects, the continu-ation of LEAD but there’s one significant difference: Intensity will be accessible to every MOL manager. This is a modular leadership development program specifi-cally designed to enhance management competencies which we’ve defined as being vitally important and in which we expect our managers to develop. Potential participants may register based on their in-dividual development plans discussed and agreed with their managers during annual performance evaluations. What we orga-nise will not be limited to classical two-day training courses. Such two-day trainings will be integrated into a six months-long systemic learning journey that ensures that

knowledge and skills are transferred to the workplace and results in behavioural change. At every point of measurement, participants should discuss with their line managers how much they have advanced in developing the capabilities or compe-tences which necessitated them registering in the program in the first place. Best in class providers will give follow up support after the end of the six month period and hold a session for them to discuss with the attendees how they manage issues better and how people working for them accept change more willingly.

When will this program be launched?It’ll be continuously available from November onwards. Participation in more than two modules per year wouldn’t be worthwhile because our goal is to ensure that managers put into practice what they’ve learned in the training sessions and this will take time. We should now think about developing ways in which we can regularly offer managers activi-ties and forthcoming training courses where they can form communities with others with similar areas to be developed and share their experiences with them. We can send them podcasts, web-based articles or interesting things that can be quickly and easily digested or present them with people who have already achieved success. It would also be important to roll out talent reviews and cali-bration sessions, not only to senior managers but to other levels too.

HR development

We are here to improve business performance

Interview with Vivien Orosz, Head of Group Capability Development & Strategic HR,

about the new MOL Group HR programs, Intensity and UPPP.

Can UPPP also be compared to the very successful Freshhh?While it’s true that UPPP is an online simula-tion game, it explicitly focuses on the E&P business as a core business and the program was developed to meet a business need. This business requires specific competences, capabilities and skills that fresh graduates have simply not yet really acquired. Fresh graduates need to broaden their skill-sets and spend years practicing those skills under supervision before they can become a competent person in the O&G industry. A lot of time is required for fresh degree holders to acquire the level of skills, knowledge, capabil-ity and experience which will allow them to work self-reliantly and independently, in other words, to achieve what we call “au-tonomy”. Typically this takes about 7-8 years in petrotechnical jobs such as geosciences or engineering. This period might seem very long to an ambitious go-ahead graduate.

Perhaps that’s why MOL Group decided to launch such programs like UPPP. It is progres-sive, and ahead of the industry; we hope it will be recognized by global awards just as Growww and Freshhh are.

How does UPPP work?We’re going to use a real site in the online simulation: a field in Pakistan. We will run the game at 27 universities located in areas in which MOL Group operates, including new places like the UK. What we want to happen is that university undergraduates increase their awareness of MOL Group when looking at the Company and that they fully compre-hend what this is all about. This is why we load the game with real data.

Why is UPPP so significant for MOL’s future?Graduates will be involved in a job placement, i.e. they’ll practically join MOL Group. This is, once again, a very special and unique feature in the marketplace. We’ve prepared for them an 18-month program aiming to cut short the period of time needed to reach autonomy and, at the same time, to keep them moti-vated. During this process, they’ll be given serious technical training by the best suppliers in the oil industry as well as business training, all to prepare them for project management. They will also be taught to make executive presentations to top managers, an area in which they obviously have no experience. There will also be a rotation period of eight months on a real site in Pakistan supported by local employees who will provide very thorough mentoring. They’ll also undergo four months exposure to HQ, where they’ll not only help out: they’ll get to understand the structure of where we all work, key stra-tegic directions and overall strategy. After this 18-month period, participants will go into op-erations, depending on their specialisations.

What are the plans for the runner-ups? Will they be kept in the talent pool?We will also offer opportunities to those who want to study further. In addition, we want to organise one-day or two-day workshops in which predefined case studies can be ana-lysed and conclusions drawn in cooperation with top management to give them further career assistance. Our goal is firstly to help them get acquainted with MOL Group and, secondly, to enable them to obtain a realistic picture of what all this means in real life. UPPP participants who do not qualify into the Top 10 will also be kept continuously informed about new programs, learning opportunities and summer programs, maintaining contact with them remains in focus.

Building organisational capability in areas such as leadership development and talent management is among the top priorities for any company.

HR development


HR development

UPPP – International Talent Acquisition ProgramUPPP is MOL Group’s new talent acquisition pro-gram. UPPP is designed exclusively for university students specialized in the field of Exploration & Production related studies. UPPP provides students the opportunity to apply their knowledge in an on-line simulation of a Pakistani oil field with real-life data. The program website is: www.uppp.info

Vladimira Senčar Perkov (INA)Human Resources Sector Director

We are very excited to be able to present Inten-sity at INA. This targeted, structured leadership program will complement current development initiatives and further enhance our colleagues’ key skills, providing them with invaluable insights and knowledge from all the areas essential to leaders in our indus-try. This program will prepare our col-leagues to be drivers of efficiency and to promote excellence in a modern, dynamic, performance-based culture and, importantly, to lead by example.

Erika Burianová (Slovnaft)HR Director

I perceive this Group modular

leadership program as one of the key factors in creating a common under-standing of what a desirable leader-ship culture means to our Company. It’s crucial for our future success to have both leaders and specialists with strong capabilities who contribute to more effective performance in a constantly changing environment. In addition, Intensity will deliver, to my eye, something that still needs to be fostered: knowledge-sharing, network building and experience changing, another added value of Intensity, which will be highly appreciated by all participants.

László Fekete (MOL HU)MOL Hungary HR Director

The LEAD program has been a clear success at the MOL Flagship for all levels of managers through its modularity of design, clear and appealing image and the posi-tive impact it has already had on our organisations. Quite naturally, demand was always there for a program with

such attributes, but available to many more participants throughout the Flag-ship companies. Intensity will address this perfectly due to its high quality international suppliers and affordable, modular competency-based features. We, as Flagship HR, are already looking forward to promoting this new “pro-duct” to business teams and decision-making managers.

Paola Pillon (IES)Head of HR and OD&CG

Given the trans-formation IES is facing, from Refinery to Logistics Hub, the development and implementation of a new strong-ly sales-oriented mindset will be a major milestone in successfully estab-lishing the new business model we so vitally need. In this framework, the Intensity program will be a key tool in achieving such an organisational cul-tural change that impacts each and every level of the organisation from individual contributors to senior-level managers, all of whom will require significant new skills, competences and capabilities.

Qasim Nawaz (MOL Kalegran)HR Manager

In Kurdistan, a career develop-

ment medium such as the Intensity program will be an excellent and important strategy for implementing the ‘Change Management’ needed in Kurdistan over the next five years. Why are initiatives such as Intensity so important? Well, many local young Kurdish professionals have not been exposed to the international working environment and, more crucially, lack the professional experience required to play senior leadership roles. If local employees are given opportunities like this modular leadership program, they can be guided to senior management levels and eventually to leadership positions much more efficiently at the same time enhancing their loyalty.

TEAM UP WITH YOUR FRIENDS AND RULE THE OIL FIELDS OF PAKISTAN WITH YOUR SUPERIOR KNOWLEDGE OF TECHNOLOGY AND BUSINESS STRATEGY. SAY YES TO ADVENTURE!

Enroll in our online competition and convince us that you are ready to start building your future at MOL Group! The top 3 teams win a EUR 20,000 prize and the opportunity to ENTER OUR 18 MONTHS’ WORLD CLASS UPPP TECHNICAL PLACEMENT PROGRAM and shape the world with us!This is your chance to win and join a company that’s RECOMMENDED BY TOMORROW!

REGISTER AT WWW.UPPP.INFO BY 23.10.2014!

Adopting INTENSITY

innovation

MOL BUBI ON THE ROAD!MOL Bubi – launched in September – is the new community bicycle system in the Hungarian capital.

Most people use both cars and bicycles, so supporting two-wheelers can improve MOL’s positive image and might even have advantageous effects on business results too, since those MOL Bubi users biking around the city on weekdays will most likely fill up at MOL service stations when on the road at the weekend” – said MOL Hungary Corporate Communica-tions Director, Domokos Szollár.

MOL Bubi Benefits At the launch, there were 1,100 apple-green, standardised, heavy-duty MOL bicycles placed at 76 docks, located some 300–500 metres’ distance from each other, awaiting riders. MOL Bubi provides freedom

for individual transport and freer flow for the community’s traffic. MOL Bubi will often be a faster means of transport than most surface transport services and people don’t need to use their own bikes.

Community bicycle systems worldwideCommunity bicycle systems can be found all over the world such as in Ljubljana in the Central European region. Its system is called Bicikelj and has operated since 2011 with 300 bicycles and 31 docks. Rental fees are, in most cases, similar to those charged in Budapest with a free initial period followed by an expo-nentially increasing rate. However, no other community bicycle system has a configuration and equipment base like MOL Bubi, which includes an emergency docking option, card operated hiring and on-bike computers.

OL Bubi was launched on 8 September. The network was put in place for more than one billion Forints, inclu-

ding a HUF 900 million EU subsidy. The Budapest Transport Company finances the system’s operation from pass fee revenues and MOL sponsorship. MOL provides an annual HUF 122 million contribution to the system, which means that MOL contri-butes every second forint.

From bicycle points to MOL BubiThe community bicycle system fits in very well with MOL’s Bike Program. Since 2011, so-called bicycle points have been set up at more than 100 service stations whereby various bicycle-related services, equipment and accessories are offered to cyclists. “MOL has been supporting sustainability for quite some time now as part of its general commitment and sup-porting cyclists certainly fits in perfectly with this effort. MOL Bubi provides a sustainable means of transport designed to get ahead in the urban jungle. How-ever, MOL Bubi is also an important initiative from our business perspective.

DOCK!There are docks located in stu-dent, tourist and office worker-fre-quented downtown sites along the Körút (Grand Boulevard) and the Városliget (City Park) in Pest and in Viziváros (Water City) and the university campus (South Buda) in Buda, as well as on Margitsziget (Margaret Island).

BUDAPEST BICYCLEThe idea to launch MOL Bubi first emerged in 2008. The name was selected through an internet-based poll and an internet voting process. “Bubi” is in fact the shortened ver-

sion of Budapest Bicycle.

MADE FOR ENDURANCEA bicycle should be durable, reliable

and safe. Bubi tyres are made of solid rubber, so punctures are out of the question. The frame

is made to be more robust than usual. The bicycle is equipped with an electronic tracking de-vice, an electronic lock and a bat-

tery that charges automatically during the ride.

MOL Bubi smarties

DOMOkOS SzOLLáR COMMUNICATIONS DIRECTOR – MOL HUNGARy

inTEnSiTy – Modular Leadership Development ProgramIntensity is a modular, short course training portfolio aimed at providing crucial skill development solutions for the entire pool of leaders, leadership successors and experts. Expected launch of Intensity: November 2014

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our world is a world of rapid changeFast transformation is a way of life in the world’s leading companies. Skills which made people successful in the past won’t help us crack it today. To manage continuous change successfully, vital new dynamic skills are needed. Get started on your journey into change right now with our new modular leadership development program and SHAPE THE WORLD WITH US! For more details contact your HR partner.

INTENSITY


MOL ENERGY Uk MANAGEMENT TEAM SET UP IN THE NORTH SEA REGIONMOL Group entered the North Sea at the end of last year in a deal with Wintershall to acquire assets in 14 offshore licences. In June, MOL Energy UK (with its partners Premier Oil and Cairn En-ergy) received approval for the Catcher Area Field Development Plan. In the same month, the com-pany completed a sale and purchase agreement with Premier Oil for offshore assets in 6 further licences. Completion of the senior management team closes out the first phase of MOL Group’s presence in Aberdeen. Over the coming months and into 2015, MOL Energy UK is looking forward to the successful outcome of its submission to the 28th UK licensing round.

he North Sea asset acquisi-tion is a significant step towards establishing a balanced portfolio in MOL Group. How does it help the

organisation mitigate risks exactly?The North Sea represents a significant growth step for the company and this growth position will allow us to balance our high risk high reward portfolio such as the world class assets we are in the process of developing in the Kurdistan Region of Iraq. What are the main risks we have to take into consideration?North Sea developments are large, complex and technically challenging. Excellence in project management and execution is critical to the success of our investment strategy. However, I am pleased to report that we've success-fully recruited our UK leadership team members. All are industry experts with proven experience in managing large independent E&P companies.

This is a new operating environment for MOL Group, especially regarding offshore opportunities. In terms of technology and operations, what are the expectations we need to meet in the area?The North Sea region has a history of pioneering new technology to create value from the basin. Heavy oil and tight reservoirs are examples of where MOL can exploit North Sea opportunities through our international Research & Development program. The extensive experience of our UK team is already earning respect from the operators and strongly influencing operations and project outcomes.

T

A WORLD-CLASS BU SINESS APPROACHE&PE&P

LEFT TO RIGHT: STEVE KEMP (OPERATIONS AND TECHNICAL DIRECTOR), JONATHAN CHAPMAN (SUBSURFACE DIRECTOR), CHRIS BIRD (MANAGING DIRECTOR) CAROLINE MCGOVERN (FINANCE DIRECTOR), NEIL ROBERTSON (WELLS DIRECTOR) AND PAUL LINDOP (INTEGRATION DIRECTOR).

What does our pragmatic approach cover?Harnessing the power of the state-of-the- art technology provided through the supply chain, using best practice approaches to managing large capital projects and opera-tional excellence.

During the summer, MOL Group further extended its portfolio in the region. Could you briefly introduce the most important assets and how these support Group E&P’s targets? Our current portfolio includes 5 key as-sets; Catcher, Cladhan, Scolty/Crathes, Scott and Rochelle. Catcher and Cladhan are approved major new development projects. Catcher is a high profile develop-ment and is the first North Sea project which MOL Group has sanctioned. The Cladhan development project will deliver near-term production and will be our first new producing asset in 2015. Scolty/Crathes is a subsea development, and although not yet sanctioned, MOL Group has been instrumental in driving partner focus with a view to accelerating project delivery. Scott and Rochelle are both producing assets which will provide robust cash flow and significant contribu-tion to our growth aspiration. What new opportunities do Group E&P business plans in the region provide to MOL Group employees, especially in terms of professional development? New opportunities in the North Sea region offer MOL Group employees various profes-sional development possibilities; acquiring knowledge from working on the new pro-jects, developing their technical skills through on-the-job training and learning from col-leagues who possess region-specific technical knowledge and industry understanding. The MOL Group E&P leadership team, together with Group HR, recognises the urgent need to support all new growth opportunities by developing and setting up formal technical career ladders, strengthening technical learning curricula, looking at opportunities to mentor junior colleagues and setting up teams of technical excellence. With each new prospect, new technical development areas can arise and, as a team, we need to be ready for any professional challenge.

Excellence in project management and execution is critical to the success of our investment strategy.

THE ERBIL OFFICEDue to the-fast track expansion of MOL Group E&P, there has been an increasing need to organise the regional autonomy of MOL Group companies to oversee and manage local issues directly. In June, MOL Group announced the setting up of a new regional office in Erbil, Kurdistan Region of Iraq, which is responsible for controlling operations in the Middle East, Africa and Pakistan, thus benefiting from the local experience of its management.The settlement of issues at a local and regional level will be much more effective in achieving MOL Group E&P targets. “We are here to facilitate Upstream operations in the Middle East, Africa and Pakistan as my directorate seeks to settle issues locally or on a regional basis and to make the control of these subsidiaries more effective for Headquarters in Budapest,” explained Dr Majdi Ahmad, newly-appointed Regional Director.

ALI MURTAzA ABBAS REGIONAL ADVISER FOR THE MIDDLE EAST & AFRICA

DR. MAJDI AHMAD REGIONAL DIRECTOR FOR THE MIDDLE EAST & AFRICA

CARL GRENz COO - MOL GROUP E&P

In line with MOL Group's vision of building a world-class E&P business, the Group has established the position of Chief Operating Officer (COO) – MOL Group E&P with the emphasis on full value-chain life cycle operational and active portfolio management. This new position has been filled by Carl Grenz, a senior professional with 39 years of experience in the oil and gas industry.


problem solving problem solving

THOUSANDS OF IDE AS: EIFFEL AND ÖTRSince 2008, employees have submitted 3,000+ ideas in the EIFFEL Downstream Program, which have contributed nearly EUR 38 million to Downstream's efficiency improvements. In 1998, TVK launched the Ideas Support System (ÖTR), which sometimes resulted in savings of hundreds of thousands of euros.

he EIFFEL Program is Downstream’s Group-level employee idea management system.

Its goals are firstly to further sup-port efficiency improvements and employee motivation through innovations generated and submit-ted by employees and secondly to provide an incentive to strengthen a cost-awareness mentality. The Program was launched in 2009 and, since then, several subsidiaries have joined the initiative, in addition to MOL and Slovnaft Downstream.The purpose of the TVK ÖTR Pro-gram is to encourage employees to generate novel and advanta-geous solutions to resolve various technical, safety and administrative problems. ÖTR follows up and monitors employee ideas from submission through implementation to post-appraisal. If the implementa-tion of an idea results in financial savings then the idea originator is recognised financially through the EIFFEL Program and at TVK through the ÖTR Program. EIFFEL Idea (MOL – Supply & Sales/DSD/Refining)Title: Improving capacity utilisation in micro wax (BSLO) processing and solvent de-waxing in the MEK plant and micro-hydro-generation in the MIH plantsIdea generators: PétEr GyörköS & Viktor Győri

Contributors: TERéz BACSURNé kURUCz,

LáSzLó DáVID, ATTILA HORPáCSI,

Ernő tóth , tiBor ZáSZlóS

One use of micro wax is as a food industry feedstock. In 2009, the lead-ing producer asked to buy significant quantities of two types of micro wax. We had no such feedstock so we had to buy-in the required amounts. We analysed the requirements and our ideas people met Refining to explore likely sources. Then, successful pilot production started in cooperation with DS Development, Refining and Controlling, contracts were signed and, in 2013, we successfully processed 630 tons realising ~EUR 65,000 net profit. In 2014, we will sell 2kt of these three products to realise for EUR 206,000. Since we have heard our main competitor, Shell, will stop base oil production at the end of 2015, demand for our products will grow. Our maximum possible output of 15kt could produce a profit of EUR 1 million per annum.

EIFFEL Idea (MOL-LUB)Title: Improving use of RALOX production equipmentIdea generator: TIBOR kOVáCS

(Refining foreman)To reduce energy consumption, indicators are a priority, particularly in the additive production plant, so the opportunity to introduce higher charge size emerged when various options were analysed using existing RALOx plant equipment. R-7/1

reactor equipment was analysed and production difficulties were found, potentially arising from in-creased charge size, which could be manually monitored by re-installing the sight glass method, which is critical because the foam phase that might emerge during reaction can be swiftly detected. Thus the existing service can maintain produc-tion. The idea could produce HUF 3.5 million in savings per year.

EIFFEL Idea (SLOVNAFT, a.s. – SCM)Title: Loading heating oil on to barges in Port BratislavaIdea generator: kARIN TóTHOVá

(Supply & Distribution Planning Expert)

Heating oil sold by MOL and B7 quality diesel by Slovnaft used to go to the same Austrian market, but B7 production was more expensive at Slovnaft. How could we change this to meet customer requirements if there were a problem with MOL’s heating oil supply? As a first step, we decided to sell normal diesel as heating oil using road tanker cars (RTCs), to reduce logistics costs. After selling the first 14kt in January 2010, we distributed heating oil as a norm.We met Commercial & Logistics and decided to use barges which meant higher savings. A pilot barge load to Korneuburg was successful. Today we ship B7 die-sel, heating oil, normal quality and Slovak quality, in barges. We now produce original heating oil qual-ity and save valuable components. The 5-year average benefit is EUR 4.3m.

ÖTR Idea (TVK)Title: Reducing hydrocarbon lossin the PE-1/HDPE-1 plant – alreadyimplementedIdea generator: JáNOS OROSz

(PE-1 unit system operator)Hydrocarbons accumulate in thePE-1/HDPE-1 Plant feed prepara-tion section regeneration nitrogen pipeline when it is out of use, due to a lack of tight hydrocarbon valves. In the past a 2" connecting pipe was installed between this nitrogen pipe and a flare pipe for the de-pressurization of the system. This earlier modification solves the over-pressurizing problem, but causes a monthly loss of roughly 2 tons of

ethylene and 6 tons of isobutene. The idea was simple. Feed this accu-mulated hydrocarbon mixture back into the solvent recovery unit using a simple cross-connection between this nitrogen pipeline and and the inlet line of the guard filter of the flash gas compressors. In this way, the hydrocarbons can be reco-vered and reused. The ethylene fraction is sent back to the Cracker as vent gas and the recovered isobutene is re-used in the plant. The estimated project cost totalled EUR 8,700 and EUR 83,000 can be achieved in annual savings, with a ROI of less than 2 months.

Join the program now, we are counting on your ideas as well - contact your local coordinator!

TIBOR záSzLóS PROCESS TECHNOLOGy ExPERT

Viktor Győri GROUP FUEL PRODUCTS SALES REPRESENTATIVE

LáSzLó DáVID REFINING OPERATIONS SUPERVISOR

PéTER GYÖRkÖS GROUP FUEL PRODUCTS SALES REPRESENTATIVE

TERéz BACSURNé kURUCz DS DEVELOPMENT & PRODUCT DEVELOPMENT ENGINEER

Ernő tóth BASE OIL AND WAx PRODUCTION MOL MANAGER

28 MOL GrOup Panorama October 2014 29

“BIBLIOBUS” NOW ON THE ROAD IN RIJEKA As part of its commitment to new initiatives in the field of culture, INA has supported the City Library of Rijeka in buying and operating a “Bibliobus”, a library on wheels, bringing books and magazines to local inhabitants who are unable to get to a library themselves.

110KV GENERATORS DONATED TO JUNALAMOL Kalegran donated generators for the vil-lagers of both Cojar and Junala to cover their electricity needs. The first two generators were handed over by Majdi Ahmad, Managing Director of MOL Kalegran.

NEW SCHOOL COMMUNITY SERVICE PROGRAMThe New Europe Foundation has initiated a new grant programme this year called THANKS! (KÖSZ!). The THANKS! Program aims to encourage collaboration between local NGOs and educational institutions so as to implement new school community service projects.

INA FOUNDS THE CROATIAN OIL MUSEUM INA and the town of Ivanić have signed an agreement to cooperate in establishing the first Croatian oil museum – the Museum of Petroleum Engineering. The museum will be situated close to Ivanić Grad, where the first oil well in Southeast Europe was drilled in 1948. The opening of the museum is sched-uled for late 2015.

BEAUTIFUL BRATISLAVA BY SLOVNAFT COLLEAGUESSlovnaft employees again participated in this year’s Pontis Foundation project “Our City”. Thirty Slovnaft employees were involved in several activities – from cleaning up black rubbish dumps under a bridge to cleaning the Little Danube and helping school children build a mud house using the techniques of our distant ancestors.

THE SZEGED HANDBALL CHAMPIONSThe Szeged handball team will play under a new name in the 2014-2015 season, Domokos Szollár, Communications Director – MOL Hungary announced: “MOL Hungary is more than happy to become the title sponsor of such a successful team, which from now on is called: “MOL-Pick Szeged”. We have been cooperating with Szeged handball players for years. They have constantly been in the Hungarian first division and, what’s more, in 2014 achieved an outstanding result in the international arena by winning the European Handball Federation Cup.”

News in brief

MMOL LEAGUE STARTED OFFThe 2014/2015 MOL Group Ice Hockey League season began on 19 September boosted by a new team: the Debreceni Hoki Klub. The team was greeted by its biggest fans: Tankcsapda, the MOL- supported rock band from Debrecen. Ice hockey fans can follow recent MOL League developments on a brand new website: www.molliga.eu and via the online MOL League TV channel. Ágnes Kelenvölgyi, Head of Corporate Giving and Internal Communications, MOL Group, commented: “MOL League has proved to be an international sporting project we can all be proud of. World class players join the League year after year with teams competing from three countries, Hungary, Romania and Slovakia that truly represent quality, dynamism, fair play and teamwork, the very values MOL Group stands for.”

IINA VOLUNTEERS RENOVATE kINDERGARTEN IN SISAk INA volunteers were invited by the “Sisak Stari” kindergarten to help renovate its premises. The volunteers gladly responded and helped to whitewash walls and repair furniture. The INA Volunteers Club was established in 2011 with the aim of offering voluntary personal investment in time, effort, knowledge and skills to help other people and society as a whole.

NNEW MOL CHAMPION – TAkING TO THE WATER An international swimming star with an international partner – MOL is the proud sponsor of Dániel Gyurta, Olympic swimmer. The Gyurta phenomenon in numbers: 2012: London Olympic Games – gold medal & a new world record – 200m breaststroke2013: Swimming World Championships (Barcelona) – gold medal & new European & World record – 200m breaststroke2014: Swimming World Cup (Doha) – victory in both the 200m and 100m breaststroke & breaks his own record in the shorter distance by 2.00.48 seconds.

A

R ROWMANIA FEST FEATURED BY MOL ROMANIA Olympic champion Ivan Patzaichin organised the Rowmania Fest

for the 4th time in Tulcea, Romania, at the end of August. The event program featured rowing contests on the Danube, live concerts, photo

exhibitions, a fair with traditional arts and crafts and the second edition of the Delta Rowmania Triathlon.

AID FOR REFUGEES IN kURDISTAN MOL Kalegran is helping refugee men, women and children with food, milk, nappies and medication due to the security situation in the Kurdistan Region of Iraq. For the thousands of Kurdish Christian and yazidi refugees in the Akre Bijel area where it operates, Kalegran has demonstrated its commitment to be in the very forefront in such relief efforts. MOL Kalegran continuously stands by to help the Kurdistan Regional Government, in collaboration with the Ministry of Natural Resources, to bring comfort to people in need.

TTALENTS OF

NEW EUROPE: GOLD, SILVER AND

HOLLYWOOD!

The 8th annual Talents of New Europe competition was announced in September in Slovakia, while young talented

people already supported by Slovnaft and the Central European Foundation (CEF) have reaped great successes:

Michaela Brchnelová (17) – Astronomy – gold medal at the Intel International Science & Engineering Fair – Los Angeles, USA

Viktor Demin – Canoeing – silver medal at the European Flatwater Canoeing Championships – Brandenburg, Germany

Ema Klučovská (15) – exclusive presentation at the Stan Winston Studio – Hollywood, USAIIES COLLEAGUES

CLEANED UP MANTOVA“Puliamo il Mondo” (“Clean Up the World” in Italian), which is one of the largest community-based environmental campaigns, was organized by Legambiente Association and involved cca. 1000 municipalities in Italy in September this year. More than 80 colleagues of IES joined the initiative and acted locally. IES volunteers cleaned up the shore of Mantova Lake opposite the refinery.

TTHE SLOVNAFT CUP 2014/2015

Nearly 180 football teams have begun playing under new rules in this year’s

top competition, the Slovnaft Cup. Slovnaft remains the title sponsor of

the 2014/2015 season, a reliable and serious supporter of a competition

that motivates teams towards athletic performances that please all football fans. The final will take place in May

2015, with the winner then advancing to the European Cup competition.


corporate responsibility & sponsorship corporate responsibility & sponsorship


RACING FUEL – WE ARE NOW RACING!

science

Two MOL Group subsidiaries, Panta and Hexan Kft., play an active role in the racing

fuel market. As a result of their cooperation,

MOL RACING FUEL 102+ entered the Hungarian

market this summer.

ased on the experience of Panta, one of Europe’s largest racing fuel pro-ducers and in light of international racing fuel market research about

demand conducted by MOL Product Development, Hexan has developed MOL RACING FUEL 102+, a racing gaso-line produced from Danube Refinery

• 100% MOL Nyrt. subsidiary • Dominant role in the Hungarian marketplace• 25 year history in the Hungarian racing fuel market • Official fuel supplier to Formula Student Hungary • Wide product range • Produces off-standard fuels • Produces hydrocarbon mixtures with one-off composition

RACING GASOLINE

Octane number: Density:

Initial boiling point:

End boiling point:Oxygen content:

MOL Racing Fuel fully meets theMSZ 228:2013 standard (E10/ESZ-98). Available from March 2014 – the fuel was introduced to the public at the Hungarian F1 Grand Prix.

40

35

30

25

20

15

5 6 7 8 9 10 11 12 13 1428

26

24

22

20

18

16

Engine speed (RPM x1000)

Pow

er (h

p)

Torque (N-M

)

1020.7555 g/cm3 at 15 oC

50.4 oC145.9 oC3.4

The red line represents MOL Racing Fuel.The blue line stands for a regular, but

elevated octane numbered fuel. The horizontal axis shows rev data.

feedstock of excellent quality even by international standards. MOL Group’s long-term ambition is to appear with its racing motor gasoline at any interna-tional car or motorbike racing event. To this end, knowledge sharing and consul-tations are going on between the two “MOL-subs”, reviewing opportunities for further collaboration, brand harmonisa-tion and integrated appearance.

• A Member of MOL Group, an IES subsidiary • One of Europe’s largest racing fuel producers • Official WTCC supplier – driver Norbert Michelisz WTCC sponsored by MOL Group• Has had its own Racing Department since 1989, characterised since birth by its innovative R & D

spirit and constant improvement of products specifically produced for competition

MOL

in detail

GO ONLINE!

áGNES kELENVÖLGYIHEAD OF CORPORATE GIVING & INTERNAL COMMUNICATIONS

MOL Group introduced its new internal and external online communication platforms in recent months.

New WEBSITE – MOLGROUP.infoThe newly setup MOLGROUP.info website is our primary

official external communications channel for reaching the international audience. It is not only a means of

introducing the organisation and our main brands to the public, but for communicating with our stakeholders in a clear way. In addition, our social media channels ensure

that we stay in touch with wider audiences interactively so they can follow what is happening in MOL Group through

our LinkedIn and new Twitter pages.

GYÖNGYI JANkY HEAD OF GROUP MEDIA & COMMUNICATIONS

October 2014 33

“All these new communication channels which are ideal platforms to facilitate knowledge, are developed in the English language for one simple reason: MOL Group wants to open up new international markets and the language of these new markets is the world language English.”

VICE PRESIDENT – GROUP CORPORATE COMMUNICATIONS

DOMINIC kÖFNER

New INTRANET SITE – Group PortalLaunching the Group Portal (GP), our MOL Group Intranet site, has been a giant step towards ensuring more consistent and efficient internal communications across the organisation. In a company that employs more than 29,000 individuals in 40 countries, communication has to be powerful and effective. This starts with clear and timely messaging and continues through optimised information flow.

t is the season to redraw maps. Russia has annexed the Crimea and Scotland has just voted on indepen-dence (and will stay in the UK – at least for now). The eastern part of

Ukraine is getting blurry, while Catalonia may try to hold a referendum on indepen-dence soon. The borders of the Middle East are also changing, at least in terms of actual control: the maps of Syria, Iraq and Libya all look like modern art with various colours splashed over them. Meanwhile, nationalist tensions are mounting in the South China Sea. In short, sovereignty seems to matter more than it did a few years ago.

Why? During good times, many people (and countries) continuously become bet-ter off, so the distribution of wealth mat-ters less. But in a less optimistic era of slow growth, the world is more of a zero-sum game – or at least that is what many people think. At the same time, the potential penalty for breaking (international) rules counts for less if a) everyone else is doing it and b) no one (including the former global policeman, the United States) wants to shoulder the burden of upholding the international status quo.

How a polity deals with separatist movements can also be a sign of maturity. Rich democratic countries tend to handle secessionist aspirations relatively well (and definitely without killing people). Such coun-tries get along well with their counterparts: prosperous democracies almost never go to war with each other. Sometimes there is no formal separation, but regional autonomy reaches such a high level that although an “umbrella” country remains, it is just an empty shell. Does Belgium really still exist, beyond its UN seat, its monarch and its sovereign bond markets (and football team)? On the other hand, violent armed conflict is much more likely among, between and within poorer, more autocratic countries.

It is no surprise that the Middle East is es-pecially ripe for change. Many of its countries are plagued by ethnic and religious divisions and it also has abundant oil and gas resources to fight over which, in turn, can finance wars. It has large numbers of idle young males with-out much real opportunity in life. Moreover, the borders of the Middle East were drawn up around the time of WW1 without much concern for ethnic identity. Rulers often rep-resent only a narrow elite and (used to) rely

on heavy oppression to stay in power. Many economies are shackled by state regulation and are all about the distribution of govern-ment largesse and perks.

The Middle Eastern status quo is already changing due to the domino effects of the Arab Spring and the departure of US forces from Iraq and Afghanistan. For now, the direction of change seems to be away from rather than towards inclusive societies. But such transition is rarely smooth; during the “interim period”, which can last a very long time, conflict and violent fracturing is likely. However, the new, more cohesive countries emerging from the current turmoil may be better raw material for achieving internal consensus and eventual democratisation.

It is easy to feel pessimistic regarding the mid-term outlook in the Middle East and elsewhere. But maybe this is the darkest hour (or these are the darkest years) and the foundations of longterm future cooperation and integration are just beginning to emerge…


barrel per day

BORDERS THEY ARE A-CHANGIN’

The Expert’s Column. The Chief Economist Team’s insight and guide to today’s trends and tomorrow’s developments. Read more at barrelperday.com

BARREL PER DAY

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MOL GROUP

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chIld healIngcOrpOrate vOlunteerIng

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SpOrtS SpOnSOrShIpSSuStaInable develOpment

talent SuppOrt & educatIOn


Everyday objects are made possible by petrochemicals, making our lives more comfortable and even more exci ng! Faster too: every racing car contains rubber and plas c from the res right through to the dashboard!

MOL GROUP’S PETROCHEMICALS BUSINESS IS THE MARKET LEADER ACROSS THE CEE REGION AND IS AMONG THE TOP POLYMER PRODUCERS IN EUROPE. For more informa on, visit our website: www.molgroup.info

PETROCHEMICALS MATTER, EVEN IN RACING

petrochemicals - mol group italy

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