Mol Nyrt., the refiner that bet on Iraq to replace decreasing resources in Europe, said it was cutting back investment at a field in Kurdistan after disappointing well test results. Shares in the Budapest-based company dropped after saying it would have a writedown in the third quarter on the value of its investments in the Akri-Bijeel Block, which had a book value of $440 million. The Hungarian refiner has focused on exploration projects in Kurdistan and the North Sea to counter the impact of weaker output in its maturing central and eastern European fields and a slump in oil prices. Even after the setback at Akri-Bijeel, Mol will keep evaluating "options for further growth in the region," it said in a statement on Tuesday. "Mol Group remains committed to maximize the value of its investments in the Kurdistan Region of Iraq," including the Shaikan field, operated by Gulf Keystone Petroleum Ltd., it said. Mol’s shares plunged as much as 3.8 percent and traded 2.5 percent lower at 12:27 p.m. in Budapest, reducing this year’s advance to 16 percent. That compares with a 27 percent gain in the benchmark BUX Index in the same period. Mol’s announcement may also put pressure on the stock in the longer term as the 2017 output forecast will be "reduced significantly," analysts at Budapest-based brokerage Equilor Zrt. led by Monika Kiss said in an e-mail. "We expect the writedown to amount to about 50 percent of the total $440 million investment at book value, resulting in a 600 forint per share impact," Equilor said.
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