Croatian parliament is expected to approve pulling out of an arbitration process with neighboring Slovenia, complicating a 22-year-old border dispute that is prompting investors to shy away from projects.
The parliament convenes Wednesday for the vote after Premier Zoran Milanovic accused Slovenia of violating the proceedings. The two nations are at odds over the maritime and coastal border at Piran Bay on the northern Adriatic Sea.
Croatian media last week published transcripts of phone conversations allegedly between a Slovenian judge on the international court and a Foreign Ministry official. Slovenian Premier Miro Cerar sought to soothe tensions Monday and appointed a new court representative and the ministry official quit. Croatian Economy Minister Ivan Vrdoljak said Marathon Oil Corp. and OMV AG dropped plans to explore the sea for oil and gas near the Montenegro because of ongoing border disagreements between Croatia and fellow former Yugoslav republics.
“The current problem with the Slovenian border convinced them that problems with border-solving are painful and protracted,” Vrdoljak said by phone on Wednesday. “On our side, we also didn’t want to enter an agreement where it wouldn’t be clear when the investors could start exploring.”
European Commission urged Croatia and Slovenia to stay in the arbitration agreement, spokeswoman Mina Andreeva said on Wednesday, adding the commission “understands concerns” of Croatia.
OMV and Marathon earlier this year were awarded seven of 10 exploration blocks in the Adriatic sea, a project in which Croatia expected an initial investment of about 500 million euros ($553 million). Eni SpA, INA Industrija Nafte and Medoil Plc were awarded the rest. Production-sharing agreements were expected to be completed this month or in August.
Vrdoljak also said a new tender for off-shore oil and gas research blocks will be called in September.