EU probes mining fee exemption for Hungary's MOL

Reuters, Tuesday January 13 2009


BRUSSELS, Jan 13 (Reuters) - The European Commission launched an in-depth investigation on Tuesday into a deal that exempted Hungarian oil and gas group MOL from recent increases in mining fees.

The probe will examine whether the exemption complied with the European Union's strict rules on state aid, the EU executive said in a statement.
"The Commission is concerned that MOL may be favoured vis-a-vis its competitors. We have to make sure that no unfair advantage is granted to any company at the expense of Hungarian taxpayers," EU Competition Commissioner Neelie Kroes said. The Commission may ask MOL to repay any gains deemed illegal.

Under investigation is an agreement from 2005 between MOL and the Hungarian government, which fixed MOL's mining royalty payments on extracted hydrocarbons for the majority of its mining fields until 2020, the statement said.

Hungary's mining fees were increased considerably for other firms in early 2008, it added.

"In its preliminary assessment, the Commission found that the measure may constitute state aid and found no grounds on which it could be compatible with the (EU) single market," it said.

(Writing by Marcin Grajewski, editing by Dale Hudson)