Government Puts Off On-shore/Off-shore Deals Until After Elections
The government decided to postpone the signing of Product Sharing Agreements (PSAs) for both the off-shore and on-shore exploration blocks until after the upcoming parliamentary elections. Also, on 24 September, the government annulled the licences for hydrocarbons exploration and exploitation in the seven off-shore blocks that were awarded to the Marathon Oil/OMV consortium.
Just a few weeks ago government officials, including Economy Minister Ivan Vrdoljak (HNS), had announced the signing of the PSAs for September (see LPJ 144). If the project had gone according to plan, the government forecast that Croatia would earn approximately €1 billion a year in revenue for a total of 25 years, with production beginning in 2020.
In retrospect, the government awarded 10 licences for the off-shore exploration and possible exploitation of hydrocarbons in January. The consortium Marathon Oil / OMV was granted a licence for seven exploration blocks (i.e. North Adriatic 8, Central Adriatic 10, 11, 22, and 23, South Adriatic 27 and 28). However, the consortium returned all seven of the licences in July due to present macro-economic environment, border discrepancies (with Montenegro) that affected the blocks and investment cuts prompted by the slump in global oil prices…