Croatia Starts Tender on Continental Oil and Gas Research

Croatia started a tender for on-shore hydrocarbon exploration to boost investments and reduce dependence on gas imports from Russia and other countries.

This is the first of three continental tenders planned that will cover a total of six research blocks, each between 2,100 square kilometers (1,305 square miles) to 2,600 square kilometers, along the Drava and Sava rivers, Economy Minister Ivan Vrdoljak told reporters in Osijek, eastern Croatia. The tender will close on Feb. 18.

“We expect to sign the first concession contracts by July 2015, and this will be a great development opportunity for this part of the country,” Vrdoljak said. “Croatia has proven hydrocarbon resources in this region. Exploiting them can help the country become an energy leader in the region.”

A production-sharing agreement draft stipulates that Croatia would retain 59 percent of the natural-gas resources found and 57 percent of the oil deposits, while the remainder goes to the company that explored the field, according to documents distributed to reporters before the briefing.

The government estimates “at least” 3.8 billion ($674 million) kuna in budget revenue a year from the on-shore drilling, Barbara Doric, the head of Croatia’s hydrocarbon agency, said at the same briefing.

Croatia, which joined the European Union a year ago, needs investment to revive growth after five years of economic recession. The government last year revised laws on hydrocarbon research, making the process for gaining permits easier in an effort to tap more of its own resources.

The Adriatic nation in April published a tender for off-shore oil and gas exploration that attracted more than 40 companies, including Exxon Mobil Corp. (XOM), Gazprom OAO (GAZP), Lukoil OAO (LKOD), Total SA (FP) and Edison SpA.

Zagreb-based INA Industrija Nafte d.d., controlled by Hungary’s Mol Nyrt., had monopoly on hydrocarbon exploration in Croatia until recently.

INA Industrija shares rose 3.64 percent to 4,000 kuna per share at 3:40 p.m. in Zagreb, extending a two-day rising streak.

To contact the reporter on this story: Jasmina Kuzmanovic in Zagreb at jkuzmanovic@bloomberg.net

To contact the editors responsible for this story: James M. Gomez at jagomez@bloomberg.net Elizabeth Konstantinova

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