OMV and Marathon return Croatia licences

ZAGREB, July 29, 2015 – Houston-based Marathon Oil and Austria’s OMV have returned seven offshore exploration licences to Croatia, only seven months after being awarded them. The move marks a setback for Croatia’s efforts to kick-start the country’s hydrocarbons industry.

The companies cited capital investment cutbacks precipitated by low oil prices as the reason for the pullback. However, Reuters news agency also reported a source as indicating border uncertainties between Croatia and Montenegro was another consideration.

Marathon and OMV had won the blocks as a consortium in January 2015, as part of Croatia’s first offshore licensing round that saw 10 licences out of 29 on offer given out. Of the three licences that remain active, two rest in the hands of the Croatian government’s own INA, and one with a consortium of Italy’s Eni and the UK’s Medoilgas.

In June, Croatia awarded six onshore exploration licences to three companies as part of its first onshore licensing round. Four of the licences went to Vermilion Zagreb Exploration, the Croatian arm of Calgary-based Vermilion Energy.

Croatia holds proven reserves of 70 million barrels of oil and 24.9 bcm (880 bcf) of natural gas, according to US Energy Information Administration data.

The recent licensing rounds come as part of Croatia’s push for energy independence, and could be seen as a move by the ex-Yugoslav country away from Russia, on which it has long been reliant for energy imports, and towards the EU, in which it became a member in 2013.

Last week, Croatia issued a tender for a €600-million LNG terminal on the Adriatic coast, which could serve as a main import terminal for non-Russian sources of gas from the Middle East and Caspian region.

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