EU high court annuls Commission decision on Hungarian state aid to MOL
MOSCOW, November 12 (RAPSI) – The General Court of the European Union annulled an earlier decision by the European Commission finding that a series of extension agreements between the Hungarian state and gas giant MOL constituted state aid, the court announced Tuesday.
According to the statement, MOL sought an extension in September 2005 of mining rights for twelve hydrocarbon fields that it had already gained authorization for, but where extraction had not yet begun. MOL and the Hungarian authorities signed an extension agreement in 2005 extending the deadlines for extraction and imposing extension fees ranging between 12.24 and 12.6%. The parties further extended the application of these fees to all of the fields that MOL had already begun exploiting under the authorization.
Hungary’s Mining Act stipulates that companies with authorization must pay our a mining fee for the extraction of oil and gas. The fee had been set at about 12% in principal, but was increased to 20% in principal in January 2008.
In June 2010, the European Commission held that the 2005 agreement, when considered next to the fee increase, “constituted State aid that was incompatible with the common market.” Accordingly, the Commission decided that Hungary should recover approximately EUR 103.2 from MOL, accounting for aid deemed to have been lost between 2008 and 2009.
According to the GCEU statement, the court found that, “Since the criteria laid down by the Mining Act for the conclusion of an extension agreement are objective and applicable to any potentially interested operator which fulfills those criteria, the conclusion of the 2005 agreement on the basis of that act did not [favor] MOL in relation to its competitors.”