Croatian Government to Sign Drilling Contracts by April
The Croatian Government has opened public debate on the Strategic Environmental Impact Study into research and exploitation of hydrocarbons in the Adriatic Sea. This is a continuation of the project in which Croatia seeks to increase production from potential hydrocarbon deposits offshore.
The Ministry of Economy has invited the public to submit comments until16 February 2015 on the previously conducted public tender where five companies obtained licenses for the exploration and exploitation of hydrocarbons in in the Adriatic.
Environmentalists and green politicians have established a campaign opposed to offshore development, citing a threat to the environment and to economic activities related to the marine environment, such as fishing and tourism.
Offshore exploration is considered one of the main projects of Social Democratic Party led government of Prime Minister Zoran Milanović. Croatia's ailing economy has seen three consecutive years of poor economic indicators. The commencement of investigations and drilling would see the fulfillment of a promise by the Minister of Economy Ivan Vrdoljak, who estimates that national economy already has benefits from cooperation with oil companies.
However, associations united in the Green Forum argue that by choosing the number of concessionaires and fields, the Government prejudged the Strategic Environmental Impact Study currently up for debate.
'The decision on calling for tenders and issuance of licenses for the exploitation of oil in the Adriatic, from the standpoint of environmental protection, we consider the worst decision of a Government so far," sayd Toni Vidan, head of the energy program of Green Action, one of the organizations that opposes the Government's initiative.
Davor Škrlec, Euro-Parlamentarian of Sustainable Development Croatia (ORaH) says that the plan for exploitation of oil opposes the European Directive on Safety of Offshore Oil and Gas Operations and that threatens the local economy.
"Exploration and exploitation of oil and possible incidents such as oil spills in the sea is seriously threat to tourism, the leading economic sector, while impact on other economic sectors, in the end, threats Croatian demography," said Škrlec.
Mirela Holy, president of ORaH and former Minister of Environmental Protection in Milanovic's Government, said that this opposition party would support the eventual exploitation of gas in the Adriatic, but not oil, which they consider too risky for the marine environment and the coast.
Croatia granted 10 licenses to three consortia for the exploration and exploitation of hydrocarbons in the Adriatic. OMV AG and Marathon Oil Corp receiving the award of seven exploration blocks to their partnership, Croatia’s Industrija Nafte d.d., two licenses and one license was awarded to a consortium of Eni SpA and the U.K.’s Medoilgas. Awarded companies will now have until 2 April 2015 to sign their exploration and exploitation agreements.
In January 2014, seismic offshore research was undertaken by Norwegian company Spectrum Geo Ltd. over a five month period confirmed the presence of hydrocarbons in the Adriatic. Minister Vrdoljak then said that Croatia could have far more oil and gas than it requires.
"It's a long way to get there, but this is a start. We pretend to be energy hub and energetic force, at least in the region," said Vrdoljak to media.
Igor Dekanić, professor at the Faculty of Mining, Geology and Petroleum Engineering in Zagreb, warned that one should be careful, because only further research could show how much oil and where it is and is it worth to drill.
"The current drop in oil prices will certainly have an impact on the dynamics of research, but not so much at the research stage which is before us in the next five years. For example, it happens in the world that large companies have canceled contracts for development of mineral deposits, but not on agreements on research. The current decline in prices could jeopardize development if one day we get positive findings. If prices stay five to six years low, then the whole project hanging," commented Professor Dekanić to Croatian daily Index.hr.
Croatian Adriatic subsea covers 54,000 square kilometers. While there is no offshore oil production at present, Croatia has a tradition of exploiting gas since 1970 when INA established a partnership with ENI. Gas production from the Northern Adriatic started in 1999 and now takes place in nine fields with 17 platforms.
Kruno Kartus