Major global energy giants are interested in Croatia's potential gas and oil reserves, and a bill on hydrocarbon exploration and exploitation, unveiled by the government on Thursday, is expected to facilitate exploration and exploitation of those resources, which might bring hundreds of millions and even billions of dollars in revenues for Croatia, according to a source in the Croatian government.
Only 15 drilling wells are active in Croatia's Adriatic side, while as many as 180 drilling platforms are operating in the Italian side of the Adriatic. Given that the Croatian and Italian parts of the Adriatic Sea have the same geological structures, it can be assumed that Croatia's Adriatic Sea is rich in reserves of hydrocarbons, notably gas, according to the source.
Upon the passage of the hydrocarbon exploration and exploitation law in the national parliament, database and two-dimensional seismic data pertaining to the reserves in the Adriatic and potential holdings on the Croatian mainland will be elaborated, which will need roughly six months. The data will be in the state's ownership and it is the state that will be allowed to sell those data to companies that offer bids for hydrocarbon exploration and exploitation.
The invitation of bids for that purpose can be expected by the end of this year, and the bidders will be given an additional six months to analyse the documents they receive, which means that the first contracts on oil and gas exploration and exploitation can be signed in mid-2014.
According to estimates of the same source from the government, Croatia can count on collecting several million dollars in the stage of exploration prior to the stage of exploitation of gas and/or oil.
The same estimates show that the gas network operator Plinacro can expect annual earnings of nearly one billion kuna from gas transport.
Contracts covering exploitation activities will be within the remit of the government and a future agency for hydrocarbons will be in charge of overseeing the implementation of the deals.
The government expects the new legislation to facilitate conditions for activities aimed at exploring oil and gas and to pave the way for the arrival of foreign companies, which should give a new impetus to the national oil and gas group INA.
The source from the government said that the cabinet did not prefer anyone when it came to possible engagement of international protagonists in the oil and gas sector and thus refuted media speculations about this topic.
"Everyone will be treated equally," he said.
