Following the collapse of Communism, Hungary became a parliamentary republic consisting of 19 counties and the municipality of Budapest. The fundamentals of a free-market economy are now in place and the country is at the forefront of economic modernization in Eastern Europe.
The entire country lies within the Neogene (Upper Tertiary) Pannonian Basin. The Hungarian oil and gas industry dates back to the first decade of the 20th century, when oil was discovered in the Vienna Basin. Commercial production, however, commenced only in 1937, in the Zala Basin of southwestern Hungary. By 1943, production rose to 16,000 BOPD, but over-exploitation during the war caused it to decline to 9,700 BOPD by 1948.
Approximately 600 MMBBLS of oil have been produced since 1909, and estimated proven reserves (end of 1993) were 147 MMBBLS of oil and 4.3 TCF of gas. Production rates at the end of 1993 were 36,900 BOPD and 490 MMCF/D of gas, supplying Hungary with about 50% of its domestic hydrocarbon requirements. In recent years, severe production declines have made the country increasingly dependent on imports from Russia.
Under the Communist regime, the oil and gas industry was run as a state monopoly (OKGT). In 1991 a decision was reached to allow foreign operators to invest in the upstream sector. Two years later, six blocks were posted in the first bidding round. These went to four international companies, including Mobil and Occidental.
Hungary is a relatively attractive place to operate for small and intermediate-size Canadian companies. Small- to medium-size hydrocarbon pools, an increasing domestic petroleum market, and the desire of both the government and opposition parties to invite foreign investment, have combined to create new opportunities for foreign oil and gas companies. As of 1995, the country has a good fiscal regime with favorable taxation and no royalties.For more information contact:
Petrel Robertson Consulting Ltd.
500, 736- 8th Avenue S.W.
Phone: (403) 218-1618
Fax: (403) 262-9135
This summary, part of Petrel Robertson’s 1995 summary of exploration and development opportunities in 31 countries around the world, has not been updated. Some of the information, particularly relating to political and economic issues, is thus out of date. It is included, however, to demonstrate the breadth and depth of Petrel’s work in each of these nations.