Hungary's MOL looking to exit UK North Sea - sources

LONDON (Reuters) - Hungarian oil and gas group MOL is seeking to exit the UK North Sea four years after entering the basin as a drop in oil prices has put margins under pressure, banking sources said.

MOL has hired Bank of America Merrill Lynch to run the sale process for the portfolio of assets, four banking sources said.

It would mark the latest retreat of a major oil and gas company from the ageing basin in recent years, as smaller, more nimble companies step in.

MOL and BAML declined to comment.

The assets are valued at “the low hundreds of millions” of dollars, two of the sources said.

MOL entered the North Sea in late 2013, months before the collapse in oil prices from over $100 a barrel, by acquiring Wintershall’s portfolio for $375 million (£280.3 million) which included a mix of producing fields and undeveloped projects. It also acquired a position in the Scott hub in the central North Sea.

The two main fields are Scolty-Crathes which started production in November 2016, in which MOL has a 50 percent stake together with operator Enquest, as well as a 20 percent stake in the Catcher field, which operator Premier Oil expects will start production this month.

MOL is not selling its Norwegian North Sea assets for now, the sources said.

The North Sea has in recent years seen a number of large deals, driven mostly by private equity-backed companies acquiring portfolios from long-standing operators in the basin where production has steadily declined since the late 1990s despite a recovery in recent years.

Those include Royal Dutch Shell’s $3.8 billion sale to Chrysaor, Engie’s $3.9 billion sale to Neptune and OMV’s $1 billion sale to Siccar Point.

Additional reporting by Gergely Szakacs, editing by David Evans