Wednesday, 11 September 2019

Oil and Gas from Dinarides Would Reduce Energy Dependency

ZAGREB, September 11, 2019 - Minister of Environment and Energy Tomislav Ćorić said on Wednesday that he was satisfied with the interest shown in a tender for oil and gas exploration in the Dinarides and assessed that possible exploitation would reduce Croatia's energy dependency and fill the state and local budgets.

"This is proof that hydrocarbon exploitation in Croatia is continuing and that we have started what we communicated in the beginning - that in addition to creating an infrastructure or alternative supply route, we are increasing production in Croatia," Ćorić told reporters outside Government House with regard to the latest concluded tender for hydrocarbon exploration and exploitation in the Dinarides, which received one bid.

"For Croatia that primarily means that our energy dependency will be decreased. On the one hand, that is what we want, and on the other, in the context of future exploration, that means revenue for the local community as well as for Croatia overall, if in the second phase exploration proves to be commercial," said Ćorić.

He recalled information provided by the Vermillion energy company regarding commercial discoveries at two exploration sites which, according to Ćorić, means a significantly higher income for local communities in the form of an allowance per square kilometre but also for the state because the state, too, will receive its share of extracted hydrocarbon quantities.

The Croatian Hydrocarbon Agency (CHA) on Tuesday announced that it had received one bid in the latest tender to issue licences for exploration and exploitation of hydrocarbons in the area of the Dinarides. Unofficial sources have said that the sole bidder was the INA oil company.

In January this year the government decided to launch procurement procedures for the issuance of licences for exploration and exploitation in the Dinarides, covering an area of 12,134 square kilometres and consisting of four exploration fields in the areas of Karlovac, Lika-Senj, Primorje- Gorski Kotar, Zadar and Split-Dalmatia counties but not including national parks and the areas off the coast and along the border with Bosnia and Herzegovina. The exploration would be conducted for a period of five years.

More news about oil and gas exploration in Croatia can be found in the Business section.

Tuesday, 10 September 2019

One Bid Received for Gas and Oil Exploration in Dinarides

ZAGREB, September 10, 2019 - The Croatian Hydrocarbon Agency (CHA) has received one bid for a tender to issue licences for the exploration and exploitation of oil and gas in the area called Dinarides, the agency stated on Tuesday.

The call for bids was advertised on February 8 and closed at midday today and a deadline for licence issuance expires this December.

"We are satisfied because a bid has been made and this tender has ended successfully and we should not forget the fact that this is still an unexplored territory. We are also satisfied that all the tenders for onshore areas of Croatia have passed well," the agency told Hina after the bid was opened.

The agency will examine the bid to ensure that it meets all the tender requirements.

In January the government decided to launch procurement procedures for the issuance of licences for exploration and exploitation in the Dinaric Alps in an area of 12,134 square kilometres and for a period of five years. The bid excluded areas of national parks and off the coast and along the border with Bosnia and Herzegovina.

"In the area of the Dinarides, approximately 545.98 km of 2D seismic data has been recorded. Exploration of the area of Dinarides, encouraged by the appearance of petroleum outcrops and bituminous rocks, commenced in the 1950s. Comprehensive and significant geological mapping and geochemical research were performed for the purpose of evaluating hydrocarbon potential of the region," CHA said on its website when the call for bids was advertised.

The exploration in the Dinarides is aimed at reducing the fall in gas and oil production in Croatia, the government said then.

More news about oil and gas exploration in Croatia can be found in the Business section.

Tuesday, 3 September 2019

Companies to Invest 80 Million Euro at Six Gas and Oil Exploration Sites

ZAGREB, September 3, 2019 - The four companies which were recently chosen by the Croatian government to receive permits for gas and oil exploration and exploitation at six locations in north-western and central parts of the country, are expected to invest about €80 million in the exploration activities in the next five years, the head of the Croatian Hydrocarbon Agency's management board, Marijan Krpan, said on Monday.

The four companies – INA, Crodux Derivati Dva, Vermilion Zagreb Exploration and the Hungarian company called Aspect Croatia – were this past Thursday awarded permits for hydrocarbon exploration and exploitation at the six locations in the interior of Croatia. Thus, the government issued two permits to INA for two locations, and two permits to Crodux, while the other two companies were given one permit each. In late October 2018, the government invited applications for seven sites, and offers have been sent for all but one location.

The companies are expected to drill 25 exploration wells in the next five years.

Energy and Environment Protection Minister Tomislav Ćorić said that Croatia was committed to the exploration and exploitation of gas and oil on its territory.

The exploration activities are due to start in six months' time.

More news about oil industry in Croatia can be found in the Business section.

Friday, 19 July 2019

INA Discovers New Gas Field in Northeast Croatia

ZAGREB, July 19, 2019 - The INA oil and gas company on Friday announced that it had registered the discovery of a new natural gas bed at the Drava-02 exploration site and that findings of exploration at the Severovci-1 gas well indicate a total of 53,000 cubic metres of gas a day.

INA registered the new well with the Croatian Hydrocarbon Agency (CHA), which was discovered in the vicinity of INA's exploitation fields in Molve, Kalinovac and Ferdinandovac in northeast Croatia.

The depth of the bore well is 3,410 metres and INA has conducted all these activities within the framework of approved programmes, INA said in a press release.

INA's Operating Director of Exploration and Production Tvrtko Perković said that he was pleased with the positive result at the Severovci-1 well because it confirms the quality, know-how and experience of INA's experts.

"Croatia is our most important area for exploration and production of oil and gas and our aim is to start production of all the existing capacities in the country. We are interested in further investing in exploration activities that could lead to discoveries and consequently production and that refers to smaller hydrocarbon basins too," Peković said.

More INA news can be found in the Business section.

Thursday, 18 July 2019

EU Approves Preparation of Documentation for New Bosnia-Croatia Gas Pipeline

ZAGREB, July 18, 2019 - Bosnia and Herzegovina's natural gas supplier BH Gas said on Thursday it had received permission from the European Union to launch a project that would connect the country's gas grid to that of Croatia.

The Directorate-General for European Neighbourhood Policy and Enlargement Negotiations on Wednesday approved the preparation of a project to build the South Interconnection BH-Croatia, the company said.

The new natural gas pipeline would run from Zagvozd in southern Croatia to Posušje and on to central Bosnia and Mostar. BH Gas said it hoped the new supply route, which would be independent of Russia, would be operational by 2023.

The main financier of the project is the European Bank for Reconstruction and Development, which will provide a favourable loan arrangement.

The EU will for now support the project with 1 million euro in grants. The job of preparation of initial documentation has been awarded to the Mott MacDonald consortium through the CONNECTA project.

Bosnia and Herzegovina is currently completely dependent on Russian gas, which is supplied via Hungary and Serbia. The new pipeline via Zagvozd should ensure it access to the EU market and the future LNG terminal on the northern Croatian Adriatic island of Krk.

Croatia is expected to build a 60-kilometre long pipeline from Split to Zagvozd as part of the project, whereas the whole route from Zagvozd to Travnik is 114 kilometres with an additional 46 kilometres of a branch pipeline to Mostar.

More news about relations between Croatia and Bosnia and Herzegovina can be found in the Politics section.

Wednesday, 19 June 2019

Croatia and Hungary to Analyse Potential Cooperation in Gas Markets

ZAGREB, June 19, 2019 - Croatian Energy and Environment Protection Minister Tomislav Ćorić and Hungarian Foreign Minister Peter Szijjarto on Wednesday agreed on setting up a working group tasked with analysing the potential cooperation on the gas markets of the two neighbouring countries.

After their talks in Zagreb on Wednesday morning, Ćorić said that they had discussed the possibilities of developing cooperation between the Croatian and Hungarian gas markets.

We have agreed on establishing a working group consisting of Croatian and Hungarian experts and in the coming months it will analyse potential pros and cons of such form of cooperation, Ćorić said.

The Hungarian minister confirmed that operators of the gas transport systems and national regulators would be included in this task.

This will be the closest cooperation between the Croatian and Hungarian gas markets so far, he added.

I would like underscore that we treat the diversification as a crucial issue. An LNG terminal is a realistic scenario and we believe that partnership can help us to be partners in this project and make it innovative from the view of the energy security of the region of Central Europe. Therefore we have agreed to continue our talks, Szijjarto said.

As for the gas supply diversification, he recalled that Hungary had already expressed readiness to negotiate a possibility for Budapest to have a 25-percent interest in the future company that would run and own the LNG terminal off the Croatian terminal of Krk.

Such cooperation could create a market situation whereby the purchase of the LNG gas at that terminal could be economically visible and competitive for us, the Hungarian minister said.

Ćorić said that he found this form of cooperation a positive step forward.

Such cooperation is expected to result in combination of stakes held by owners and the lease of capacities in the terminal. However, he admitted that there are differences in which steps to be taken in that regard.

More energy news can be found in the Business section.

Wednesday, 22 May 2019

Gas Networks of Croatia and Bosnia to Be Connected Despite Serb Opposition

ZAGREB, May 22, 2019 - The European Bank for Reconstruction and Development (EBRD) has provided 500,000 dollars in a grant for the elaboration of a feasibility study of a new gas pipeline that is supposed to connect Bosnia and Herzegovina's and Croatia's networks despite opposition by authorities in the Serb entity, local media reported on Wednesday.

The future gas pipeline will make it possible for Bosnia and Herzegovina to have access to the trunk pipeline which will also provide a connection with the future LNG terminal on the Croatian island of Krk.

The Sarajevo-based Faktor portal reported that this move would lessen Bosnia's dependence on gas supplies from Russia and Serbia.

The BH-Gas company's director Jasmin Salkic was quoted as saying that a tender for the preparation of the feasibility study would be advertised next week.

All the relevant documentation is to be completed in the next 12 months and it is expected that the pipeline will be operational in 2023 at the latest.

The "Southern Interconnection" project is regarded to be strategic by the authorities in the Croat-Bosniak Federation.

The future pipeline would extend from the southern Croatian town of Zagvozd to Posušje, Bosnia and Herzegovina and further on to Mostar and Travnik.

Croatia is expected to build a 60-kilometre long pipeline from Split to Zagvozd as part of the project, whereas the whole route from Zagvozd to Travnik is 114 kilometres with an additional 46 kilometres of a branch pipeline to Mostar.

The whole project is estimated to be valued at 100 million euro.

A favourable loan to be granted by the EBRD will cover the costs. The grant for the feasibility study was ensured with the assistance of the USAID agency. An agreement to that effect was signed during the EBRD's 2019 Annual Meeting and Business Forum in Sarajevo earlier this month.

Earlier this year, the government in the Republika Srpska entity concluded that the project was not a priority for the entity and rejected it. Serb authorities withheld its support for a future Bosnia-Croatia agreement on interconnecting the two countries gas networks.

More news about the relations between Croatia and Bosnia can be found in the Politics section.

Wednesday, 30 January 2019

Government to Open Dinaric Alps for Oil and Gas Exploration

ZAGREB, January 30, 2019 - The government decided on Wednesday to invite bids for licenses for oil and gas exploration and exploitation in the Dinaric Alps, with Environmental Protection and Energy Minister Tomislav Ćorić saying it was part of the government's activities to boost Croatia's energy autonomy.

Bids will be invited for four areas covering 12,134 square kilometres in total in Karlovac, Lika-Senj, Primorje-Gorski Kotar, Zadar, Split-Dalmatia and Šibenik-Knin counties. Exploration is to last five years. It excludes national parks and areas off the coast and the Bosnian border.

The tender will be advertised by the Croatian Hydrocarbon Agency and the bids will be assessed by a commission to be appointed by Ćorić. At his ministry's proposal, the government will decide on the issue of an exploration and exploitation license for each of the four areas for a maximum 30 years.

The exploration in the Dinarides is aimed at reducing the fall in gas and oil production in Croatia, the government says.

Ćorić said the exploration would be conducted under the strictest ecological standards and in communication with local communities. Recently he said the exploration in the Dinarides would not harm tourism development.

More news on the oil and gas exploration in Croatia can be found in the Business section.

Wednesday, 21 November 2018

Tender for Hydrocarbon Exploration in Dinaric Alps Announced

ZAGREB, November 21, 2018 - Minister of Environment and Energy Tomislav Ćorić called on Wednesday on all those concerned to join the discussion of the Green Book, which will be the basis of preparing an energy strategy, and announced that a call for bids for hydrocarbon exploration and exploitation in the Dinaric Alps could be expected soon.

The Green Book, which is currently under public consultation, will serve as a platform to prepare an energy strategy of Croatia until 2030 with an outlook to 2050, and I am calling on all those interested to join and make a contribution to Croatia's energy future, Ćorić said in an address to the 4th international oil conference organised by the JANAF and Transneft oil companies.

Speaking about the ministry's work over the past year, Ćorić recalled that parliament had adopted a law on hydrocarbon exploration and exploitation which opened a new chapter in the context of exploration and exploitation. He recalled a recent tender for exploration and exploitation in seven fields in the Panonian Basin.

Energy stability is a prerequisite for economic growth which is contingent on a synergy of own production, development of supply routes and good infrastructure, he underscored.

Ćorić recalled that currently Croatia imports 80% of oil and 60% of gas and that it needs to reduce the dependence on imports.

He announced that in that regard a call would soon be published for exploration and exploitation in the Dinaric Alps, adding that he believes that it will attract a lot of interest. He added that Croatia should consider whether it wanted to pursue exploration and exploitation of the Adriatic and that this required a consensus.

Asked by reporters whether the government will co-finance an LNG terminal on Krk island if there isn't sufficient interest for the terminal's capacity lease, Ćorić said that he personally believes that the LNG terminal is an exceptional strategic interest and that if necessary the state should consider co-financing it.

State Assets Minister Goran Marić underscored that the state is the largest shareholder in the Jadranski Naftovod (JANAF), crude oil transportation company, and that it supports the company's business growth, adding that its priority remains to be the reliable and supply security for Croatia and to meet all contractual obligations toward its partners.

The conference was also told about the significance of infrastructure in the oil transport system and of Janaf's role in supplying southeast Europe.

Sergey Kazanstev from the Russian state-owned Transneft oil pipeline company said that Janaf and Croatia are an important partner to Transneft and Russia.

"Janaf supplies almost all of southeast Europe, and whether refineries will operate or not depends on Janaf. I believe that we are utilising our strategic geographic position in the best possible way," Janaf's president of the management board, Dragan Kovačević said.

He underscored that Janaf had moved from oil transportation to oil storage and that it intends to transform Omišalj on the island of Krk into a hub in the Adriatic and to become the main oil trader in the Mediterranean.

The conference in Zagreb attracted about 40 oil companies from around the world as well as experts in oil and energy to discuss challenges on the energy and oil markets, a low-carbon development strategy, the EU's energy security strategy, safe transport issues, the increasing complexity of the oil business, growing competition, price volatility and maintaining profitability.

For more on oil exploration in Croatia, click here.

Sunday, 21 October 2018

Gas Supply System Ready for Winter

ZAGREB, Oct 21, 2018 - Croatia's gas supply system is ready for the coming heating season and Croatians will be provided with sufficient amounts of gas, it was said at an assembly of the Croatian Gas Professionals' Association (HSUP).

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