March 26, 2019 / 2:05 PM / 4 months ago

Croatia eyes more gas and oil production, use of geothermal sources

ZAGREB, March 26 (Reuters) - Croatia’s tender for gas and oil exploration in the north of the country has met good initial demand from potential bidders, while it is also eying investments in geothermal electricity production, a top energy official said on Tuesday.

“More than 10 companies have so far visited our data room. They are mostly already active in some nearby countries like Slovenia, Hungary or Romania,” said Marijan Krpan, who heads the state hydrocarbon agency, which is in charge of gas and oil exploration and exploitation in Croatia.

The tender for seven blocks in the northern Panonian region over an area of 14,272 square kilometres closes on June 28.

“Four of those blocks already have a confirmed production potential. We expect almost certainly to find bidders for them, but there are also indications that the other three blocks could find demand,” Krpan told Reuters in an interview.

At the same time Croatia is running a tender for four blocks in the country’s mountainous central and southern regions which closes on Sept. 10, but more exploration there is needed.

“As opposed to northern Croatia, these areas are not yet explored well and more data is a prerequisite for further potential steps towards exploration and exploitation. The Panonian region is less risky in that sense,” he said.

That is why exploration works in the Dinarides region, according to the tender, can take up to seven years with an exit option for companies after three or five years.

As opposed to neighbouring Montenegro, which is set to begin gas and oil exploration in the Adriatic, Croatia dropped a tender a few years ago aimed at exploring its seabed due to protests by environmentalists who said that such activities would harm the tourist industry.

Krpan, however, did not dismiss that option.

“Croatia will have a ready expert response in case there is an oil discovery in Montenegro. We will follow with interest what happens as the geology does not know the borders,” he said.

Croatia imports some 80 percent of its oil needs and around 60 percent of the gas it consumes. Gas production has been falling in recent years, mostly in the northern Adriatic.

“A hope to revitalise domestic gas and oil production is why we’re working on these tenders,” Krpan said.

He said Croatia also had a strong potential in geothermal resources in the north of the country which could be used for the production of electricity and heating energy. Croatia recently built its first geothermal electricity plant.

“We’re now also working on tenders to take advantage of geothermal sources for energy production,” he said.

Reporting by Igor Ilic; editing by David Evans

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