ZAGREB, Sept 12 (Reuters) - Hungarian oil and gas group MOL has raised the prospect of legal action against the Croatian government if talks fail to resolve a long-running dispute over management rights at Croatian utility INA.
Talks on redefining the agreement between the two main shareholders in oil and gas group INA are due to start on Sept. 18.
Croatia sold 25 percent of INA to MOL in 2003 and then allowed it to raise its stake to almost 50 percent by 2009.
But the government, which has 44.8 percent, wants to be an equal partner in INA and currently sees MOL as having too many management rights, while MOL feels Croatia has not fulfilled all of its obligations.
Croatia’s daily Jutarnji List said on Thursday MOL was ready to sue Croatia and demand 2 billion kuna ($351 million) in damages for Zagreb’s failure to take over INA’s loss-making gas business, which Croatia agreed to do in 2009.
A MOL spokesperson told Reuters MOL had sent a letter to the Croatian government in July saying it wanted to sit down and try to reach an agreement on INA’s future. The spokesperson declined to elaborate on the daily’s report but said:
“Whilst it is clear that finding a workable solution together is in the best interests of all stakeholders in INA, MOL recognises that it must also protect its own stakeholders.”
“Being a publicly listed company, MOL is finding itself under certain legal obligations vis-à-vis its shareholders and stakeholders to further pursue good faith negotiations, and failing that, to commence the most appropriate legal action. We can confirm also that MOL has instructed counsel in connection with its investments in INA,” the spokesperson added.
Croatian Deputy Prime Minister Branko Grcic said earlier this week that talks with MOL would cover all aspects of INA’s business and management and “we will take a tough negotiating stand”.
Zagreb has blamed MOL for failing to invest enough in INA’s two refineries and, in a statement on Aug. 1, said it had achieved only modest business results and failed to activate INA’s full potential.
Croatia’s former prime minister, Ivo Sanader, was found guilty in a trial last year of agreeing in 2008 to accept a 5 million euro ($6.6 million) payment from MOL in exchange for granting it a dominant position in INA. Both MOL and Sanader deny the accusations and Sanader filed an appeal.
INA has upstream and downstream businesses and operates in Croatia, the Middle East and Africa.
$1 = 5.7045 Croatian kunas Reporting by Krisztina Than in Budapest, Zoran Radosavljevic in Zagreb; Editing by Mark Potter