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On 10 June, the Government of the Republic of Croatia, represented by Premier Tihomir Orešković and Minister Tomislav Panenić, signed five onshore production sharing agreements for the exploration and exploitation of hydrocarbons. Agreements were signed between the Government of the Republic of Croatia and Canadian company Vermilion for four exploration blocks and with Croatian company INA-INDUSTRIJA NAFTE d.d. for one exploration block.

Representatives of the Nigerian based company Oanda Plc are expected to sign a contract for one exploration block in the forthcoming period. Prime Minister Tihomir Orešković stated that onshore exploration and exploitation of hydrocarbons is one of the most important economic projects for the future of Croatia.

“I am especially proud since the signing of these agreements will ensure the future of an industry that has already had a decisive role in Croatia’s economic development” – said Prime Minister Orešković and added that Croatia today sends a strong message as a country that welcomes partnership with investors and a country that wisely manages its resources.

Minister of Economy Tomislav Panenić, emphasised the significance of the signed agreements and importance of the project for the region of Slavonia.

“Exploration and exploitation of hydrocarbons are very important projects that have the potential to enable sustainable economic development. Also, I am very happy as a Slavonian, because these agreements will bring economic growth to Slavonia and Baranja and all of Croatia.”– said Minister Panenić.

President and CEO of Vermilion Anthony Morano thanked the Prime Minister and the Government of the Republic of Croatia for their support in the realization of the investment and added – “Vermilion is honored to now be a part of the Croatian economy, with its vibrant democracy, ‎strong institutions, and capable workforce. We look forward to being a long term investor in this country.”

These agreements are of strategic importance for the Republic of Croatia. The exploration period will last five years, and in the case of commercial discovery, exploitation period will last 25 years. Exploration activities will engage investments in amount of approximately 88 million EUR, while, the potential net revenue for the state budget in case of exploitation, depending on the proven oil and gas reserves, are estimated to reach an amount between 3.4 and 6.8 billion HRK on an annual basis. Apart from the direct revenue for the state budget, strategic importance is reflected in the fact that the production of oil and gas can provide energy security and independence of the Republic of Croatia and bring significant benefits to the economy. It is necessary to point out the stability of energy supply together with development of direct and indirect industry. It is expected that investments in exploration and exploitation of oil and gas will be the driver of the local economy in terms of engaging local industry and suppliers as well as creating a new jobs.

– article from azu.hr