Croatia approves the signing of six onshore production sharing agreements
ZAGREB, Croatia -- The Croatian government approved production sharing agreements for the exploitation of hydrocarbons on six onshore acreage blocks in Drava, Sava and eastern Slavonia. The surface area of the awarded lands range in size from 2,100 to 2,600 km2. Exploration block DR-02 was assigned to Ina-Industrija Nafte, a Croatian company; exploration block DR-03 was given to Oando Plc, a Nigerian company; and Canadian company Vermilion was awarded licenses in blocks DR-04, SA-08, SA-09 and SA-10.
Awarded licenses are a prerequisite for the start of negotiations with the selected bidders to conclude production sharing agreements. Upon completion of negotiations, the Croatian government authorized the Minister of Economy, Tomislav Panenić, to sign the contracts with the selected bidders.
The exploration period will last five years, and in the case of commercial discovery, an exploitation period will last 25 years. Exploration activities are expected to spur investments of approximately €88 million, while, the potential net revenue for the state budget in case of exploitation depends on the size of the discovery.
Beside the direct revenue for the state budget, the production of hydrocarbons will provide energy security and independence for the people of Croatia and bring significant benefits to the economy. The development of these energy resources will drive the local economies in terms of engaging industry and suppliers as well as create new jobs.
