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Energy & Natural Resources

Croatia

With the sale of most of the shares in Croatia's national oil and gas company to its Hungarian counterpart in 2006 and the passage of the new Energy Act, the government has lost control of the gas market. In response to this changing landscape, Croatia's strategic plan for the national gas market is based on two goals: ensuring a free market and developing a network that would facilitate this.

One of Croatia's obligations as part of its forthcoming accession to the European Union is the incorporation of the EU Third Energy Package. To this end, Parliament has passed the Energy Act, which regulates security of supply and sustainability, generation and consumption, policy and planning, energy market and public service energy activities, and general principles of energy activity.

The exploration and exploitation of oil and gas in Croatia, performed in accordance with the legal framework in force, has faced several difficulties. Consequently, the Ministry of Economy is eager to pass a new act which would facilitate the tendering process. Other developments in this sector include progress of the Plomin C tender and the discovery of new oil reserves in northeast Croatia.

In April 2012 the Croatian government increased the tariff rates for all customer categories and announced that prices will continue to rise until they meet the EU average. Meanwhile, in order to achieve security of electricity supply, the government is planning a number of projects, including investments in existing facilities and several new hydropower plants.

Following a tender announced in October 2011, Prirodni Plin doo has begun the exploration of possible storage capabilities on the Grubiško polje field. The company has also invested in two additional wells, expected to commence operation later this year, which will add an additional 20,000 to 45,000 cubic metres an hour to the current extraction capacity of the Okoli storage facility.

A tender for exploration permits in 14 areas in northern Croatia has been annulled by the new government because the tender terms did not ensure free competition and allow all potential bidders to make serious bids. Meanwhile, the new mining regulations, which have been harmonised with EU law, will open up national oil and gas natural reserves to all interested parties for exploration and exploitation.

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