Friday, 15 November 2019

INA Plans to Expand Retail Network in Bosnia and Herzegovina

ZAGREB, November 15, 2019 - Croatia's INA oil company intends to buy the Banja Luka-based Krajinapetrol company to expand its existing network of petrol stations in Bosnia and Herzegovina, the Bosnian business news website capital.ba said on Friday.

According to capital.ba, INA has received the green light from Republika Srpska's (RS) Energy and Mining Minister Petar Đokić that it can conduct due diligence at Krajinapetrol before making a final decision on the possible purchase of a majority stake.

Krajinapetrol's current majority owner is the entity's government and related shareholders' funds, while INA currently owns 9.7% of the company's shares. The company emerged after the former Yugoslavia disintegrated and the RS authorities took over the petrol stations and infrastructure that INA had owned in Bosnia and Herzegovina during the time of Yugoslavia.

Krajinapetrol now manages a network of 15 petrol stations mostly distributed in and around Banja Luka.

Financial indicators show stable business operations and a growing revenue, which this year has increased by 2.5 million euro from 2018.

Krajinapetrol's total capital is estimated at 12 million euro and the company currently employs 168 workers.

INA has the largest retail network for oil derivatives in Bosnia and Herzegovina, with 45 petrol stations which were originally limited to the Bosniak-Croat Federation entity but later began to expand to the Bosnian Serb entity.

More news about the Croatian national oil company can be found in the Business section.

Monday, 28 October 2019

INA's Revenue Up 2%, Profit Decreases

ZAGREB, October 28, 2019 - INA Group's revenue in the first nine months of 2019 totalled 16.55 billion kuna, two percent more than in the same period of 2018 while the group's profit dropped by 36% to 679 million kuna, shows a financial report the group released on Monday.

CCS EBITDA excluding special items amounted to 2.397 billion kuna, improving 8% compared to the same period last year. The average oil prices decreased somewhat during the first nine months of 2019, therefore the reported EBITDA amounted to 2.208 billion kuna and profit amounted to 679 million kuna, the group said.

The group notes that the first nine months of this year were an intensive investment period.

"CAPEX increased by 69% compared to the same period last year and amounted to 1,541 million kuna, mainly driven by refining investments. Investments in Croatia amounted to 1,319 million kuna, more than double compared to the same period last year. Net gearing amounted to 21% with net debt at 3,036 million kuna," the group said.

Sandor Fasimon, President of the Management Board of INA, said in a comment that the company's intensive investments in the first nine months had started to show results.

"Total investments exceeded 1.5 billion kuna, majority of which was spent domestically. Rijeka refinery turnaround, as one of the largest ones in the company’s history, was completed. Numerous improvements implemented during this turnaround are already visible in the better production structure, with a higher share of profitable white products. This is also to be further improved with future expected projects, in line with the INA Downstream 2023 New Course program.

"Also, the increased level of Upstream activities in Egypt is starting to give results with a 23% increase of oil production in Egypt. This, together with the continuous workover activities in Croatia, currently stabilized the hydrocarbon production impacted with natural decline," Fasimon said.

More INA news can be found in the Business section.

Wednesday, 23 October 2019

INA Extracts 21 Billion Cubic Metres of Gas from Northern Adriatic

ZAGREB, October 23, 2019 - The INA oil and gas company on Wednesday marked the 20th anniversary of continued production of natural gas in the Adriatic Sea.

"In the last 20 years over 21 billion cubic metres of gas has been extracted by 18 platforms in the northern Adriatic. These figures encourage us to make further progress in the exploration and exploitation of hydrocarbons in Croatia, primarily in the northern Adriatic which offers the potential which I believe we will know how to use," Environment and Energy Minister Tomislav Ćorić said at a ceremony held on the Ivana A platform, located 36 kilometres from the nearest mainland.

Ćorić stressed that hydrocarbon exploration and exploitation was being conducted in line with the highest environmental protection and safety standards. "Successful projects like this testify to the importance of strategic and responsible management of resources with a view to developing the economy and increasing the share of domestic production."

Ćorić visited the platform in the company of INA CEO Sandor Fasimon and the head of the Agency for Hydrocarbons, Marijan Krpan.

Fasimon said: "The purpose of our oil and gas exploration and production activities is to maximise the existing potential domestically, both offshore and onshore. We have incorporated this into our development plans because 15 years from now we want to be proud of our company and remain a reliable partner to the Croatian economy."

Krpan said that the Northern Adriatic project was very demanding in terms of technology and concept and that it put Croatia among countries with the know-how for offshore hydrocarbon production.

Ćorić recalled that INA had begun hydrocarbon exploitation in the northern Adriatic in 1999 and that it was an excellent move. He said that currently 1.1 million cubic metres were extracted daily or about 400 million annually, which is about 15-20 percent of domestic consumption.

"In the last few years we have launched several campaigns for hydrocarbon exploration and exploitation, all of them onshore. The northern Adriatic offers certain potential and I'm sure we will know how to use it in the future," the minister said.

Asked about the LNG terminal, Ćorić said that it was being built and that it would be operational at the end of 2020. He noted that the LNG terminal would help meet Croatian needs for gas and diversify supply routes for Europe. "The exploitation of hydrocarbons is one way of reducing Croatia's energy dependence, the other being the construction of alternative infrastructure," Ćorić said.

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

Sunday, 29 September 2019

Rijeka Oil Refinery to Install 4 Billion Kuna Worth of Equipment

ZAGREB, September 29, 2019 - An overhaul worth 800 million kuna was carried out in the Rijeka Oil Refinery in Urinj over the first four months of this year, the largest to date, and the installation of a 4 billion kuna delayed coker is being prepared, it was said at the Refinery Open Day on Saturday.

CEO Ivan Krešić said the event was organised to make the company as transparent as possible in its operations and relations with the local community.

The delayed coker, whose installation should be completed in three years' time, will increase profitability and enable the Rijeka refinery to rank with the most high-tech refineries in Europe as well as ensure its long-term viability, he added.

A contract on the installation should be signed by year's end.

More than 2,000 external contractors from dozens of domestic and international companies were hired for the overhaul, said Ivica Jerbić, the refinery's director.

Regular air and sea quality measurements around the refinery show the best results, except in the immediate vicinity, but the overhaul will significantly reduce hazardous particle emissions, he added.

More news about INA oil company can be found in the Business section.

Wednesday, 31 July 2019

Lazard Selected as New Consultant on Buyback of MOL's Stake in INA

ZAGREB, July 31, 2019 - The New York-based investment bank Lazard is the Croatian government's new consultant on the buyback of the Hungarian energy group MOL's stake in the INA oil company, Finance Minister Zdravko Marić told reporters in Zagreb on Wednesday after a meeting of the government's Advisory Committee on INA.

Marić recalled that a consortium of Morgan Stanley, Intesa Sanpaolo Group and Privredna Banka Zagreb had previously been selected as a consultant, but that disagreements had emerged over what should be included in the agency agreement, notably technical aspects of the hiring of consultants.

"We decided to conduct interviews with other bidders from the first round and we have selected a new consultant, Lazard," Marić said.

Environment and Energy Minister Tomislav Ćorić said that the decision on signing the agreement with Lazard would be formally adopted at a Cabinet meeting on Thursday.

Ćorić said that the new consultant's services could cost 9 million euro at most.

The agreement with Morgan Stanley, Intesa Sanpaolo Group and Privredna Banka Zagreb cost €8 million.

Ćorić said that due diligence could be completed in six months, and that the government would make its offer to MOL in the first quarter of 2020.

More news about INA can be found in the Business section.

Monday, 29 July 2019

Possible New Consultants for INA?

ZAGREB, July 29, 2019 - Environment and Energy Minister Tomislav Ćorić said on Monday that information about a possible new government consultant for the buy-back of INA's shares from the Hungarian energy group MOL would be clearer after a meeting of the INA Advisory Committee on Wednesday.

Asked whether a new consultant would be selected in the process of buying back INA's shares, Ćorić said that the Advisory Committee was meeting on Wednesday and that after that the next steps would be known.

Last year the government selected the consortium of Morgan Stanley, Intesa Sanpaolo Group and Privredna Banka Zagreb (PBZ) to act as the government's investment advisor on the possible buy-back of INA's shares from MOL and the possible subsequent sale of those shares to a new strategic partner. The consortium's offer for this task was €8 million.

The Nova TV commercial television channel said on Sunday that the Advisory Committee would select a new consultant who would conduct a deep scan of INA and that the task could possibly be given to the Lazard firm.

Asked why the consortium failed to calculate INA's worth, Ćorić said that "disputes emerged regarding certain activities" and the task was not completed.

Ćorić asserted that it was realistic for the government to make an offer based on the results of the analysis and for the other side to then react to that bid. He added that a decision on the buy-back would only be known in the final phase.

"The buyer Croatia and the seller MOL have to agree on a price," he added.

In response to reporters' remarks that this could burden relations considering that the Hungarians wanted to be involved in the LNG Terminal on Krk island, Ćorić said that these were two separate matters. One refers to relations between Croatia and a private company whereas the matter of the LNG terminal refers to relations between the two countries.

"Croatia is interested in a partnership regarding the LNG terminal and not only with Hungary," he said, adding that Croatia wanted to retain a dominant role in the LNG terminal as its majority owner.

"We have a Hungarian bid to purchase 25% of the terminal. As far as we are concerned, negotiations on this matter are contingent primarily on the lease of the terminal's capacity," Ćorić said.

Asked whether the government was satisfied with the way INA was being managed, Ćorić said that the fact that the government wanted to buy back MOL's stake in INA spoke for itself.

In the meantime, communication has improved while in the future decisions regarding investments, primarily in the refinery business, are essential, he said.

More news about the INA-MOL issue can be found in the Business section.

Friday, 26 July 2019

INA: Net Profit Down 65%

ZAGREB, July 26, 2019 - In the first half of 2019, the INA oil group recorded a net profit of HRK 188 million excluding special items, which is 65 percent less than for the same period last year and a consequence of a lower refining margin environment, its financial statement showed on Friday.

The INA Group revenues totalled 9.79 billion kuna, up 3 percent compared to the first half of 2018. CCS (current cost of supplies) EBITDA dropped by 11 percent to 1.175 billion kuna.

Capital Investments (CAPEX) more than doubled compared to the same period last year and amounted to 1.183 billion kuna, mainly driven by refining investments.

Net gearing amounted to 14 percent, whilst net debt was at 1.763 billion kuna, reflecting a very strong balance sheet.

Investments in Croatia amounted to 992 million kuna, more than double compared to the same period last year.

"First half of 2019 was a period of intensive investment for INA. Total investments reached almost 1.2 billion kuna, majority of which was spent domestically. Refining capital expenditures more than tripled compared to the same period last year, to more than HRK 800 million, mainly related to the Rijeka Refinery turnover, one of the largest ones in the company’s history," Management Board president Sandro Fasimon said.

More news on INA 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, 30 May 2019

Hungary Wants to Resolve INA-MOL Relationship

ZAGREB, May 30, 2019 - Hungarian Foreign Minister Peter Szijjarto said on Thursday the relationship between the Croatian INA oil company and Hungary's MOL energy group burdened relations between the two countries which, beside this problem, cooperated well.

Every time we meet with Croatian government officials, INA is on the agenda, but we always let our Croatian friends know that is strictly a business issue, not a political issue being dealt with by the Hungarian government, Szijjarto told reporters outside the Croatian government after meeting with Prime Minister Andrej Plenković.

I must admit the relationship between MOL and INA or MOL and the Croatian state is a burden in our relations and we would like to get rid of this burden, but that's up to the two companies or to the company and the Croatian state. We can only keep our fingers crossed that they come to a solution, said Szijjarto.

Advancement of the relations with Croatia on the energy front is crucial for Hungary, he said. Energy security in this part of Europe is a critical issue. You see the relationship between Russia and Ukraine when it comes to the transit of gas, you see that Exxon and OMV still haven't decided on the exploitation of gas fields in Romania. That's why the LNG terminal in Croatia is one of the viable solutions for the diversification of energy sources. And since we realise that energy cooperation can't be separated from the MOL issue, we hope for a solution to this challenge, Szijjarto said.

He arrived in Zagreb to open a new Hungarian Embassy building, saying this was a clear signal of the importance Hungary attached to relations with Croatia. We are neighbours and our allied and strategic connection is obvious. We wish to advance and strengthen that relationship, which currently has certain shadows because of energy issues, but other than that, we cooperate as we should, Szijjarto said.

A press release from Plenković's office said the two officials concluded that Croatia-Hungary relations had been enhanced in recent months. Trade exceeds 2.2 billion euro and bilateral cooperation within the EU and NATO is very good, it added.

They underlined the importance of boosting economic cooperation, notably in energy, by taking into account supply security in all of central and eastern Europe. They also talked about the realisation of the LNG terminal project in Croatia.

Szijjarto extended Hungary's full support to Croatia for entering the Schengen Area, and both officials said they were happy with the status and rights of the Croatian minority in Hungary and the Hungarian minority in Croatia.

Opening a new Hungarian Embassy building in Zagreb on Thursday, Foreign Minister Peter Szijjarto said many had humiliated and looked down on the central European peoples who were the driver of the EU's development today, which was why it was important to additionally bolster the unity and cooperation between Hungary and Croatia.

We know that the EU, European culture, identity and security are faced with big challenges, which is why it's good to see from Hungary that in our southern neighbourhood lives a proud people that wants to preserve its identity and won't renounce its Christian values, Szijjarto said outside the embassy.

Many humiliated and looked down on us in central Europe, yet we have become the driver of the EU's development, and for that jump to happen it was necessary to understand that it's better to cooperate than disagree, he said, adding that Budapest considers Zagreb an ally, a friend and a good neighbour.

We also won't forget that in the midst of the biggest attacks in the European Parliament, the Croatian members from the HDZ's ranks stood by Hungary, which is why I'd like to thank Minister Pejčinović Burić and the Croatian government, said Szijjarto.

Last September, the EP adopted a report calling on the European Council to find that Hungary was endangering democratic freedoms and fundamental rights, thus gravely breaching the values on which the EU was founded. Five Croatian MEPs - Dubravka Šuica, Ivana Maletić, Željana Zovko, Marijana Petir and Ruža Tomašić - were among those who voted against the report.

Szijjarto said Hungarians appreciated Croats very much and loved Croatia, as evidenced by the 600,000 Hungarians who summered on the Croatian coast last year, bringing Croatia 400 million euro in revenue.

He recalled that Croatia was first in Hungary's foreign investments.

Pejčinović Burić said trade was constantly rising, from 2.1 billion euro in 2017 to 2.3 billion euro in 2018.

The two ministers said Croatia-Hungary cooperation was excellent with regard to ethnic minorities and in science, defence, and in culture, which will be seen next year, during Croatia's EU presidency, in a joint exhibition on the ties between the two peoples at the Budapest National Museum and Zagreb's Klovićevi Dvori gallery.

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

Wednesday, 1 May 2019

INA Increases Revenue and Profit

ZAGREB, May 1, 2019 - In Q1 2019, INA Group net sales revenues increased by 15% from the same period of last year to 4.25 billion kuna, while net profit excluding special items increased to 58 million kuna, the group said in a press release on Tuesday.

"The positive result was driven by the continuation of favourable hydrocarbon prices and increased sales," the group said.

EBITDA recorded a 12% increase to 539 million kuna, while net profits excluding special items grew to 58 million kuna, a much better result than in Q1 2018, when they totalled one million.

Capital investments in Q1 totalled 618 million kuna, much higher than in Q1 2018, when they totalled 96 million kuna.

Net gearing dropped to 6.6% with net debt at 838 million kuna.

Commenting on the results, INA Management Board President Sandor Fasimon said that after strong results in 2018 the group again achieved a very strong result in Q1.

"INA utilized the market conditions and increased both its sales and EBITDA, revenues growing by 15%, to the level of over 4 billion kuna in just one quarter. Upstream benefited from the stable hydrocarbon prices and production levels. Maturity of INA fields and the natural decline in gas production was offset by the continuous efforts in oil production increase. This was followed by the increase in investments, majority as before focused in Croatia, but also with a visible increase of spending in Egypt.

"Refining operations are marked with a major turnaround in Rijeka refinery, one of the biggest in recent years. This, together with the other investments projects in the company, brought the investment level to 618 million kuna, biggest level in Q1 since 2010."

This demonstrates INA's commitment to developing all business activities in a sustainable way, Fasimon said.

"Still, the deteriorated environment and the less favourable refining margins continue to burden the overall results of the segment expected to be mitigated in the future by INA DS New Course 2023 program. Despite the expected lower processing levels, caused by turnaround, INA managed to increase its sales and utilize the market opportunities both domestically and on the core markets, visible by 8% sales increase in Croatia and 23% in Bosnia & Hercegovina. Retail operations also recorded a visible growth of 7%, partly due to expansion of Montenegro network."

Overall, despite the Q1 2019 being very investment intensive, the company’s financial position stays strong and the low debt levels allow for stable operations and future investments, Fasimon says.

According to data in the report, Exploration and Production EBITDA excluding special items decreased by 18% to 569 million kuna while net sales revenues of the business grew by 3% to 969 million kuna.

Refining and Marketing revenues, including Consumer services and Retail, totalled 4.04 billion kuna, an increase of 15%. CCS EBITDA of Refining and Marketing including Consumer services and Retail excluding special items amounted to 14 million kuna as against a loss of 114 million kuna in the same period last year.

The result was achieved on the back of higher sales volumes in both wholesale and retail and strong sales margins, at a period of significantly lower processing due to a major turnaround in Rijeka Refinery, the company said.

Nonetheless, the loss from the core activity was 102 million kuna, according to the report.

More INA news can be found in the Business section.

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