ZAGREB, 19 May 2022 - Croatia can be a crucial country for future energy supply to the countries in its neighbourhood that now fully depend on Russian energy sources, Prime Minister Andrej Plenković said on Thursday commenting on the "REPowerEU" plan to rapidly reduce dependence on Russian fossil fuels in Europe.

Plenković told a news conference that the REPowerEU Plan, which the European Commission presented on Wednesday as its response to the hardships and global energy market disruption caused by Russia's invasion of Ukraine, highlights the need to invest in gas and oil pipelines networks.

This is an opportunity for the Croatian companies Plinacro and Janaf, and talks are being conducted with them to see what can be done, said the PM.

Plinacro, a leading Croatian gas transport system operator, and Janaf, which manages the oil transport network, have initial projections of necessary investments, according to Plenković.

The EU has a high degree of understanding for Croatia's crucial role, and the Croatian energy companies "have important roles in the changed energy structure of Europe," he added.

The PM highlighted three aspects of the EC plan: saving energy, diversifying supplies and accelerating the rollout of renewables.

The €300 billion plan consists of schemes for the disbursement of €225 billion in loans and €75 billion through grants.

The investment in gas and oil infrastructure is important to us because they create possibilities for additional investment, enhance our capacity and help Croatia become a strategic country in the diversification of supply routes, said Plenković.

He said that the government was taking necessary steps to fill gas storage capacities, as required by the EU.

For more, check out our politics section.

ZAGREB, 11 May 2022 - Croatian energy regulator HERA Steering Board chair Danijel Žamboki said at a conference of gas professionals on Wednesday that even in the worst-case scenario regarding gas supply, Croatia would be in a much better position that most EU countries.

"That is so because of the diversification of supply routes, the LNG terminal and domestic gas production, which has been growing," Žamboki said at the 37th international conference of gas professionals, taking place in Opatija on 11-13 May and organised by the Croatian Gas Centre and the Croatian Gas Association.

Recalling that the government in March adopted a set of measures to alleviate the impact of rising energy prices, Žamboki said that the basic task of the regulator was to care for energy producers and protect consumers and that it would continue working on that.

The state secretary at the Economy and Sustainable Development Ministry, Ivo Milatić, said that Croatia was among leading countries in terms of the protection of households amid rising gas prices.

Speaking of the LNG terminal on the island of Krk, he said that it gave Croatia a rare kind of security, "with 800 million cubic metres of gas to enter the gas system from production in the coming year and 1.5 billion cubic metres from the LNG terminal."

The ministry will support a further increase in the terminal's capacity to 6.1 billion cubic metres, he said, noting that that could be achieved in three years' time or sooner.

The director of the Okoli underground gas storage facility, Vlado Vlašić, recalled that the storage capacity had been leased for the next five years and that there was currently no interest on the part of the clients to fill the facility, but that he believed the facility would retain its role and ensure supply stability, thanks to the government's involvement.

Vlašić said that work was underway to expand the storage capacity, which would enable the company to provide additional services in the gas business.

LNG Hrvatska director Hrvoje Krhen said that so far 2.4 billion cubic metres of natural gas had been delivered so far via the LNG terminal at Omišalj on Krk, that 28 LNG tankers had docked at the floating terminal and that around 4 million cubic metres of liquefied natural gas had been delivered.

The LNG terminal supplies gas for around 55% of the market and the gasification capacity has been expanded by an additional 300 million cubic metres of natural gas. The capacity has been fully leased until 2027, and the possibility of further expanding it is being considered, Krhen said.

Plinacro gas transport system operator Management Board member Marin Zovko announced plans for expanding the capacity for shipping gas from the terminal, increasing the capacity of the gas pipelines running to Hungary and Slovenia, and considering a project for an Adriatic gas pipeline grid and connecting to neighbouring countries, such as Bosnia and Herzegovina.

Nikola Mišetić of INA said that own gas production met around 30% of gas needs in Croatia. This year INA will invest more than one billion kuna in research and production, he said, adding that the company was also dedicated to green projects.

Before the opening of the conference, several members of the Green Action protested inside the venue where the event was taking place, carrying banners reading "Gas business is crime" and calling for turning to renewables and energy efficiency as well as reducing the need for gas as much as possible.

For more, check out our politics section.

ZAGREB, 4 May 2022 - An EU ban on imports of crude oil and oil products from Russia should not have a major impact on Croatia, which mostly gets its supplies from the Mediterranean, energy expert Igor Dekanić told Hina on Wednesday.

"Croatia is not in a bad position because more or less it imports oil products from the Mediterranean, specifically from Italian refineries. As for natural gas, we have an LNG terminal that provides considerable sources of supply from countries other than Russia," Dekanić said.

Asked if there would be enough energy products and at what price, he said that there would probably be enough energy products, but that it was difficult to say at what price because energy prices were formed based on expectations. He said he expected higher prices because suppliers that would replace Russia would certainly not offer oil and oil products at lower prices.

Asked about the position of the Hungarian energy company MOL, a co-owner of the Croatian oil company INA, Dekanić said that MOL's position on Russian oil imports could be inferred from the position of the Hungarian government, which has so far been reserved about energy sanctions against Russia. Since MOL's imports from Russia are not insignificant, the company will have to be very "innovative" if the sanctions against Russia should be enforced.

"Between political and ethical principles and sanctions in the energy sector there is always a grey zone," Dekanić said, noting that despite the scale of the war in Ukraine neither side was suspending Russian gas deliveries via Ukraine to Europe for now. "Reserves are being destroyed, but the oil and gas pipelines are not. That would probably be the last thing to destroy."

As for the European Commission's proposal to ban Russian oil imports, Dekanić said that the proposal was yet to be discussed by the European Parliament and it should also be seen how Germany and eastern Europe would react, because they are more dependent on Russian energy products than western Europe is. "Goals and principles are one thing, while the position of individual members of the Union is another," he said.

Addressing the European Parliament in Strasbourg on Wednesday, Commission President Ursula von der Leyen called on the member states to phase out imports of crude oil within six months and refined products by the end of the year.

"We will make sure that we phase out Russian oil in an orderly fashion, in a way that allows us and our partners to secure alternative supply routes and minimises the impact on global markets," von der Leyen said.

She also called for those responsible for war crimes committed in Bucha, a suburb of the Ukrainian capital Kyiv, and for the siege of Mariupol to be brought to justice.

The EU's sixth package of sanctions against Russia over its military invasion of Ukraine also includes a proposal that Sberbank, Russia's largest bank, be disconnected from the SWIFT international banking payment system and that three Russian media organisations be banned from broadcasting in the EU.

For more, make sure to check out our dedicated politics section.

ZAGREB, 17 Feb 2022 - The INA Group registered a net profit of HRK 1.31 billion in 2021, after a loss of HRK 1.14 billion in 2020, the leading Croatian oil and gas group said in a financial statement on Thursday.

INA's net sales revenue grew 51.5% on the year to reach HRK 22.4 billion in 2021.

The company's CCS EBIDTA excluding special items reached HRK 3.03 billion, up by 70% from 2020.

"In 2021 the macro environment for oil and gas industry has improved thanks to the easing of restrictive measures and rising hydrocarbon prices. In such environment Exploration and Production once again spearheaded the recovered result, although the production natural decline continues in line with the mature portfolio. The other segments further supported the results, primarily Retail due to improved fuel and non-fuel sale, also partially due to tourist season, which was better than expected," the company's management board chair, Sandor Fasimon, was quoted as saying.

The financial statement notes that the hydrocarbon prices had doubled compared to 2020.

This price increase helped the Exploration and Production segment to be "the main contributor to the results with EBITDA excluding special items of HRK 2.5 billion, despite natural decline of production on mature fields."

"Refining and Marketing including Consumer services and Retail CCS EBITDA reached HRK 0.9 billion on the back of better Retail sales both in fuel and non-fuel segments."

Investments rise

Investment activities increased throughout the segments compared to 2020 with CAPEX level of HRK 1.6 billion, of which roughly half was spent in Refining and Marketing. The main strategic investment, Rijeka Refinery Upgrade Project continues with focus on construction works and equipment delivery to the site.

INA said it had successfully issued a HRK 2 billion bond on the domestic market in December 2021, "creating a solid financial base for the intensive investment cycle ahead."

"In time of changes in the energy sector, INA is committed to diversifying its portfolio and assisting the green transition, regardless of our core business. Two new solar power plants are going to be built at Virje and Sisak, which is an important step in the company’s green electricity production," the statement said.

For more, check out our business section.

ZAGREB, 26 May, 2021 - The JANAF oil pipeline and storage system said on Wednesday it had signed its first contract with Austria's OMV Supply & Trading Ltd for storing up to 99,000 cubic metres of crude oil at the Omišalj Terminal for a period of two years.

Management said the contract confirmed JANAF's strong export orientation, adding that the company generated over 60% of its revenue from foreign clients.

The new contract ensures the further use of our storage capacity and stable business in the longer term, Management Board chairman Stjepan Adanić and Board member Vladislav Veslica said.

For more about diplomacy in Croatia, follow TCN's dedicated page.

As Vedran Marjanovic/Novac writes on the 6th of August, 2020, the Ministry of Economy and Sustainable Development has issued a decision according to which the Canadian company Vermilion can start exploring for oil and gas in the municipality of Petlovac in Baranja.

In March this year, Vermilion sent a request to the Ministry of Environmental Protection, which was annexed to the Ministry of Economy by a recent government reform, to conduct an environmental assessment procedure on the need to assess the environmental impact of the Novo Nevesinje-1 exploration well in the Petlovac municipality in Eastern Croatia.

The aforementioned decision of the Ministry of Economy and Sustainable Development states that Vermilion isn't obliged to carry out an environmental impact assessment procedure of the project on the exploration well Novo Nevesinje-1.

''The project is acceptable for the ecological network and it isn't necessary to carry out an environmental impact assessment procedure,'' stated the Directorate for Nature Protection of the competent Ministry in reference to the area in question in Petlovac.

The decision of the Ministry states that the need to implement the environmental impact assessment procedure for the Novo Nevesinje-1 well was expressed by the Administrative Department for Physical Planning, Construction and Environmental Protection of Osijek-Baranja County. On the other hand, according to the same source, the municipality of Petlovac submitted their position on the same occasion, which claimed that the project on the planned well is not expected to have a significant impact on the environment.

In its request to the Ministry, Vermilion stated, among other things, that it needed 1.2 hectares of space for the exploration well of Novo Nevesinje-1, and that the planned depth of the well was 1105 metres. According to the same source, the well is 1.3 kilometres away from the nearest settlement.

Novo Nevesinje-1 is located within the Drava-04 exploration field for which Vermilion received a Government permit back in June 2015. On the same occasion, the Government issued permits to Vermilion for three more exploration fields, Sava 8,9 and 10.

In August last year, Vermilion also received a permit for the Sava 7 exploration field. In total, the Canadian company was approved to explore two million and 350 thousand hectares in five exploration fields, making it the largest oil and gas explorer in the country. The first exploratory wells in the mentioned fields were drilled by Vermilion in June last year in Vukovar-Srijem County at the Ceric and Berak locations. On the Berak well in the Tompojevci municipality, as has since been learned from the mayor Zdravko Zvonaric, sufficient quantities of gas have been confirmed and the Vermilion well has been sealed until the construction of a gas pipeline that would connect the field to the network.

''We're currently in the process of changing the urban plan of the municipality in order to start with the construction of the gas pipeline from the Berak field to Stari Jankovci. In addition, Vermilion has expressed its intention to build another well in the municipality of Tompojevci, this investment would have already been approached if this whole situation with the coronavirus hadn't occurred,'' the mayor of Tompojevci stated. Zvonaric pointed out that the experiences of the municipal administration with the aforementioned Canadian company are very positive, among other things, he added, Vermilion paid a donation for the construction of a children's playground in the municipality.

Companies that have been assigned fields for oil and gas exploration in Croatia are obliged to report all of their findings to the Hydrocarbons Agency. The financial obligations of oil and gas researchers to the state consist of the so-called royalties or field concession fees and the delivery of part of the oil and gas obtained from the fields.

In addition to here in Croatia, Vermilion is present in Central Europe with oil and gas exploration work in both Hungary and Slovakia.

For more, follow our business page.