Wednesday, 5 December 2018

Croatia to Abandon Attempt to Buy Back INA Oil Company Shares?

ZAGREB, December 5, 2018 - Prime Minister Andrej Plenković said on Tuesday that, if Croatia and Hungary failed to reach agreement on the price at which MOL's stake in the INA oil company would be bought back by Croatia, that problem would become insurmountable because no one was in a position to set aside more funds than they could or should.

Responding to a reporter's question at a news conference after a summit of the Central European Initiative (CEI) in Zagreb, Plenković said that Hungary and Croatia had different views on the issue of the INA oil company. "The price of restoring Croatian ownership of INA is not something that can be negotiated overnight nor is it that simple. Quite the contrary, we are aware of its complexity and ultimately, if we do not agree on a price, in my opinion, that may become an insurmountable problem because nobody can set aside more funds than they can or should," said Plenković.

The Croatian government has estimates, he said. "We have rough estimates. What varies are broader details that can be important for energy companies, their future prospects and relevant global trends. However, we haven't done anything wrong in this case, quite the contrary, I believe that our decisions have been good and that that fact has even helped deal constructively with certain processes and problems. That was the content, spirit and tone of our meeting yesterday," said Plenković.

He reiterated that after his meeting with Hungarian Prime Minister Viktor Orban in Zagreb on Monday it was concluded that relations between Croatia and Hungary were very good and free of outstanding issues in terms of their good neighbourly relations, as well as that there were no problems in the two countries' relations regarding INA and MOL.

Prime Minister Orban said yesterday that Hungary saw the INA-MOL situation as an issue concerning the two companies.

In late 2016, Plenković said that the Croatian government had decided to restore its ownership of the INA oil company by buying back MOL's stake in INA, after Croatia lost a case filed against MOL before the United Nations Commission on International Trade Law in Geneva.

In mid-January last year, the government formed a council for negotiations with MOL regarding the possible purchase of shares held by that Hungarian company in INA, and in April this year it selected a consortium consisting of Morgan Stanley, Intesa Sanpaolo Group and Privredna Banka Zagreb as its investment consultant for the possible purchase of the stake and its possible subsequent sale to INA's new strategic partner. However, a contract with the consultants has not been signed yet.

For more on the INA-MOL problems, click here.

Tuesday, 4 December 2018

INA-MOL Situation Remains Without Direction as Orban and Plenković Meet

The Summit of the Central European Initiative (SEI), which brought together the heads of state of six countries in Zagreb, saw the Hungarian Prime Minister, Viktor Orban, arrive in Croatia. Despite talks between the two leaders, the INA-MOL situation remains without real direction.

As Jadranka Dozan/Poslovni Dnevnik writes on the 3rd of December, 2018, this opportunity, as was well understood by the involved parties, was also used for bilateral talks between the Hungarian PM and Croatian Prime Minister Andrej Plenković. After the meeting, there were more or less protocol words and a few statements decorated with positive intonations released. The talk, according to Plenković, showed the desire of both countries to continue to develop economic cooperation as well as the good will to overcome existing problems primarily regarding INA and MOL, so as to solve and not further endanger the development of relations in all other areas.

Orban isn't quite as diplomatic as the ever-polished Plenković in his view, and in his opinion it isn't normal that two neighbouring states which look to each other as allies have allowed six or seven years to pass since the last official visits between their respective prime ministers.

"During the last few months, we've conducted numerous negotiations, and today I came to bring our relations back," Orban said, recalling that cooperation with Croatia began back in the 1990s with an advocate in the Hungarian parliament, and underlining the fact that he was a friend of President Franjo Tudjman. This will result in a new dialogue between the two neighbouring governments, it's too early to talk in any real detail, but talks on the energy sector are expected, as well as those over the ongoing INA-MOL situation and the question of Hungary's interest in the LNG terminal project on the island of Krk. Despite the aforementioned, the talks between the two prime ministers certainly weren't focused purely on neighbourly relations in terms of business and energy strategies.

Justice had its part to play in the talks. On the one hand, there is the arbitration dispute at the International Settlement of Dispute Settlements in Washington, and other disputes over the request of the Croatian judiciary for the extradition of Zsolt Hernadí of Hungary's MOL.

From the aspect of energy strategy and business, especially in light of the declarative plan of the Croatian Government on the purchase of MOL's stake in INA, the appearance of Minister Tomislav Ćorić on Sunday was very indicative.

The day before talks with the Hungarian side over the INA-MOL situation were due, Minister Ćorić confirmed that the Croatian Government had not yet signed a contract with the investment advisory consortium for the INA project, which was chosen back in April, after a multi-month process which was characterised by several so-called "extensions".

According to the minister, a contract with a consortium in which Morgan Stanley, Intesa Group and PBZ are involved has not yet been signed owing to the fact that when conversation with them following the initial selection, "points around which there was no complete understanding" arose. Despite this, Minister Ćorić claims that "they're currently being resolved". This raised numerous questions from the side of experts and left them wondering what the situation would be like if international consultants hadn't stepped in.

Meanwhile, there were more meetings between representatives of the Croatian Government and Hungarians, and one can quite easily conclude that these talks were without any real specific focus. Most of the bigger problems appear to lie with the sheer lack of clear views on what strategic goals need to be achieved and in which development segments the Croatian Government intends to place the most emphasis.

As with most things in Croatia, the path to solving the INA-MOL situation is littered with obstacles and appears to be very far from a solution, regardless of the apparent good will on both the Croatian and the Hungarian side.

Make sure to keep up with our business, politics and news pages for more.


Click here for the original article by Jadranka Dozan for Poslovni Dnevnik

Thursday, 22 November 2018

Hungarian Prime Minister Orban Angry at Croatia?

ZAGREB, November 22, 2018 - Economy Minister Darko Horvat has said that in the coming months a final decision on Croatia's buyout of Hungarian energy group MOL's stake in Croatia's INA can be expected, underscoring that it is more important that the entire process is well done than the fact how much time all that will take. He also commented on claims that Hungarian Prime Minister Orban was angry with Croatia.

When asked by the press on Thursday about the outcome of the process, Horvat declined to speculate. "We are in a very delicate stage of the selection of relevant consultants that can help us in due diligence and in making a final decision on INA's current value and its value on the market," he said adding that this part of the process was within the remit of the ministers of finance and energy.

Earlier on Thursday, Energy Minister Tomislav Ćorić also commented on scenarios for Croatia's buyout of MOL's stake in INA, and said that he expected a decision in the months ahead. After a reporter remarked that the government was taking too long to decide, Ćorić said such a job should be done properly. "It's much better to work longer and for the analysis to be good than to do it in a short time and have a lacking analysis," he said.

In January 2017, the government set up a council for negotiations with MOL on a possible buyout of its stake in INA. This past April, the government chose a consortium comprising Morgan Stanley, Intesa Sanpaolo Group and Privredna Banka Zagreb as its investment consultants in the possible buyout and subsequent sale to a new strategic partner for INA. However, a contract with these consultants has not yet been signed.

Also on Thursday, Horvat and Ćorić commented on Hungarian Prime Minister Viktor Orban's alleged anger at Croatia over the reactivation of an arrest warrant for MOL CEO Zsolt Hernadi.

Ćorić told reporters "What anger? Only good vibrations, please" and announced that Orban was expected in Croatia on December 3.

Croatian media have carried Hungarian portal's claim that Orban was "very angry that Croatia betrayed Hungary and didn't act gentlemanly in the lifting of the blockade on Croatia's OECD membership bid in exchange for giving up the Hernadi arrest warrant."

Horvat said he did not see any reason for anger. Furthermore, he did not perceive such feelings in any form of communication with Orban.

The Croatian minister expressed hope that Slovenia would follow Hungary's suit and remove its objections to Croatia's OECD membership bid.

For more on the INA-MOL issues, click here.

Friday, 7 September 2018

INA to Close Refinery in Sisak in 2019?

ZAGREB, September 7, 2018 - A group of workers at the Sisak oil refinery said on Friday they had documents showing that the management of the INA oil company were preparing two versions of a plan to terminate production at the plant, with January 1 or May 1, 2019 as the dates for the closure of the refinery.

Tuesday, 14 August 2018

INA's Concession in Egypt Extended until 2023

ZAGREB, August 14, 2018 - The International Egyptian Oil Company's licence for the Ras Qattara concession in Egypt has been extended until 28 March 2023, Croatia's oil company INA said on Tuesday.

Thursday, 9 August 2018

MOL to Have Full Control over INA Oil Company?

ZAGREB, August 9, 2018 -The MOST party leader Božo Petrov expressed fear on Thursday that the government-sponsored draft law on the privatisation of the oil and gas group INA, which has been put to public consideration, would actually revoke Article 10 of the existing legislation, which would clear the way for MOL to completely take over the biggest Croatian company.

Thursday, 26 July 2018

Government Still Thinking about Buying MOL’s Stake in INA

ZAGREB, July 26, 2018 - Environment Protection and Energy Minister Tomislav Ćorić said on Thursday the process of a possible buyout of Hungarian energy group MOL's stake in Croatian peer INA was taking its course and that he expected an expert analysis by the government's consultants, Morgan Stanley and partners, to be ready by year's end.

Tuesday, 17 July 2018

Decision Revoking INA Exploration Licence Quashed

ZAGREB, July 17, 2018 - The INA oil company on Tuesday reported that it had received a ruling by the High Administrative Court quashing an earlier decision by the Administrative Court and a decision by the Economy Ministry to revoke an exploration licence for the Sava exploration site, and returned the case to be reconsidered.

Tuesday, 26 June 2018

United States and Russia Compete for Croatian National Oil Company INA

Castleton Commodities International has sent a letter to the government about the purchase of INA’s shares from MOL after Russian company Rosneft showed interest.

Sunday, 24 June 2018

Government Confirms US Interest for INA

ZAGREB, June 24, 2018 - The Croatian government has confirmed the receipt of a letter which US company Castleton Commodities International (CCI) sent to Croatian Prime Minister Andrej Plenković in mid-March, expressing its interest in being a new strategic partner to Croatia's oil company INA.

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