ZAGREB, 6 July 2022 - Croatia has lost an arbitration case regarding INA brought by the Hungarian oil company MOL, in which MOL alleged that the Croatian government did not honour its obligations from a gas business agreement, the Večernji List daily said on Wednesday. 

According to unofficial information, having lost the case, Croatia will have to pay between 250 and 300 million US dollars, including interest. Croatia's objections regarding corruption during the purchase of INA by MOL from the Croatian state were rejected as well.

The case was dealt with by the International Court for Settlement of Investment Disputes (ICSID) in Washington.

It was launched in 2013 by MOL, which claimed that Croatia had not honoured its obligations from a master agreement on gas business and its annexes.

Under that agreement, signed in 2009, INA was to divest a part of its (nonprofitable) gas business by having the state take over the underground gas storage facility at Okoli, which the state did, but it did not take over gas trade as well, which was the reason for MOL's lawsuit.

This is the second arbitration case Croatia has lost to MOL. The first one was dealt with by the UN Commission for International Trade Law (UNCITRAL).

Prime Minister Andrej Plenković in late 2016 said that Croatia would buy back MOL's stake in INA and the process is still under way.

MOL is the single largest shareholder in INA, holding 49.1% of the stock (4,908,207 shares), while the Croatian government holds 4,483,552 shares, or 44.8%. Private and institutional shareholders hold 608,241 shares, or 6.1%.

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ZAGREB, 4 July 2022 - Economy Minister Davor Filipović said on Monday that the wholesale price of fuel would be restricted for the next two weeks so that major oil market stakeholders, including Ina, would bear the brunt compared to small companies, which had done well in previous years.

He underscored that the government aimed to protect citizens and help the economy, so fuel prices at off-motorway filling stations would be the same as in the past two weeks, namely HRK 13.08 for diesel and HRK 13.50 for Eurosuper 95 petrol. He added that fuel prices at motorway filling stations would be reduced to HRK 13.83 for petrol and HRK 14.28 for diesel.

Filipović said that under the latest government decision, the wholesale price would be limited for the next two weeks so that the most significant stakeholders in the oil market could bear most of the burden compared to small distributors.

"We have been continually communicating with retailers. In the past two weeks Ina did not increase its wholesale price, and small distributors on the most part sold their own stocks. Therefore, we can say that in the past two weeks they did not earn as much as they had planned," said Filipović, adding that in the next two weeks, INA would take on most of the burden and would not increase its prices for retailers to make it easier for them to operate.

He said that there were 40 small oil distributors and that in 2021 they generated total sales revenue of almost HRK 3.5 billion, and a profit of HRK 133 million. They operated equally successfully in 2020, the minister said. All of that should be taken into account and it is necessary to take a look at the bigger picture because we are in a delicate situation, Filipović said, adding that without the government's intervention, the price of diesel would be more than HRK 16.

Asked what the Prime Minister referred to when he mentioned tax scissors for profiteers, Filipović said that the government was considering all options and monitoring the situation and would act in the interest of citizens and the economy when it assessed it to be appropriate.

When asked if small distributors were unjustly complaining, he underscored that the aim was to limit wholesale prices. The situation is difficult for everyone, small distributors are not accustomed to it because their business has been successful in the past, he said.

"These past two weeks and the next two weeks will certainly not be easy for them, but I believe that we will all successfully overcome this situation together," the minister emphasized.

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ZAGREB, 20 Jan 2022 - The INA oil company and the Končar electrical, transport, and energy company have signed a contract for the construction of the solar power plants Virje and Sisak, INA reported on Thursday.

The Virje solar power plant will be built as part of INA's gas processing facility Molve while the plant in Sisak will be located on INA's industrial premises and is one of the projects to transform the former refinery into a modern industrial center, INA said in a press release.

The power plants will be able to produce 16,000 megawatts of electricity a year, which can cover the average consumption of 4,800 households in Croatia or cities the size of Makarska or Jastrebarsko.

Works at both sites are expected to start in the spring and should be completed during 2023.

The project is yet another step in the process of transforming INA into an energy company and is in line with our development guidelines. Our aim is to upgrade the existing value chain and these solar power plants are the start of creating a sustainable portfolio in producing electricity from renewables. With this project, INA will contribute to supply security and to compliance with the climate objectives Croatia has taken on as an EU member, INA Management Board President Sandor Fasimon said.

Končar's Management Board President Gordan Kolak said that state-of-the-art technology would be used to construct the solar power plants. Končar won the tender amid stiff international competition.

For more, check out our dedicated business section.

ZAGREB, 30 Dec 2021 - The government decided on Thursday to suspend the buyback of INA from MOL due to new legal circumstances stemming from the Supreme Court's final ruling against former PM Ivo Sanader, who was found guilty of receiving bribes from MOL executive Zsolt Hernadi.

Sanader was given six years and Hernadi, who is beyond the reach of Croatia's authorities, was given two years in this graft case.

The Andrej Plenković government also decided to launch a review of the 2016 ruling of the United Nations Commission on International Trade Law (UNCITRAL) under which Croatia lost an arbitration case it brought against MOL before that court based in Geneva.

The government authorized the Economy Ministry to request the Federal Supreme Court of Switzerland to review the UNCITRAL decision so as to declare an amended contract on the relationship between the shareholders in INA and a contract on the gas business, both signed in 2009, null and void.

The ministry is also authorized to continue activities concerning Croatia's participation in the arbitration process which the Hungarian oil and gas company MOL initiated in 2013 before the International Centre for Settlement of Investment Disputes (ICSID), an arbitration institution in Washington.

In February 2017, Croatia filed a lawsuit with the Swiss Federal Court requesting the annulment of the arbitration ruling in the case Croatia v. MOL that was conducted in line with UNCITRAL arbitration rules. However, the Swiss court rejected Croatia's request in October that year.

In late December 2016, UNCITRAL overruled Croatia's request to nullify amendments to a 2009 contract on management rights in the oil and gas company INA and a gas business master agreement, finding that evidence was not sufficient to prove that the amendments were the result of corruption activities.

This prompted Prime Minister Andrej Plenković to state on 24 December 2016 that his government had decided to regain ownership of INA by buying the entire stake held by MOL.

In August 2019 the government chose the Anglo-French investment bank Lazard as a consultant for its plans for the buyback. Lazard presented a preliminary report on due diligence in June 2020 and a final report in September 2020, giving an estimate of INA's value.

MOL is the single largest shareholder in INA, holding 49.1% of the stock (4,908,207 shares), while the Croatian government holds 4,483,552 shares or 44.8%. Private and institutional shareholders hold 608,241 shares or 6.1%.

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