Offshore exploration and exploitation

After closing the first offshore licensing round for exploration and exploitation of oil and gas in the Croatian Adriatic and awarding licences for 10 blocks, the government opened the public debate on the environmental impact of offshore exploration and hydrocarbon production.(1) The Ministry of Economy has examined over 2,600 objections and issued a revision of the Report on the Evaluation of the Strategic Environmental Impact Study for the Framework Plan and Programme of the Offshore Exploration and Production of Hydrocarbons.

According to the report, the revisions include eight areas:

  • Tourism – production platforms should not obstruct or dominate the view from beaches, residences or tourist areas.
  • Fishery – exploration and production activities should be coordinated with the Ministry of Agriculture in areas where they could influence fish stocks. Exploration activities should cease between May 26 and June 24 in order to allow for tuna fishing, and the area around the island of Jabuka has been declared a 'no take zone' since it is a spawning ground for fish.
  • Noise and biodiversity – seismic activities should be carried out in accordance with the Agreement on the Conservation of Cetaceans in the Black Sea, Mediterranean Sea and Contiguous Atlantic Area 2013.
  • Protected areas – exploration activities should observe a 10 kilometre (km) buffer zone from protected areas (eg, national parks, nature parks and nature reserves), while exploitation should observe a 15 km buffer zone.
  • Ecology – the plan and programme should be carried out 1 km from any ecological network (eg, the outer islands, including Jabuka, Brusnik, Svetac, Palagruža and Galijula), for the protection of birds, and at least 5 km from any water wells.
  • Cumulative effect – seismic activities should not take place simultaneously on more than three blocks.
  • Sea organisms – all drilling fluid should be secured onshore.
  • Accidents – marine traffic routes should be altered to minimise the risk of accidents.

Additionally, the government will monitor the indicators for marine pollution according to the Action Programme for the Coastal and Marine Environment Management Strategy.

Onshore exploration

Following the expiry of the February 18 2015 deadline for the submission of onshore oil and gas exploration bids, the government has chosen the preferred bidders.(2) One onshore block (Drava 2) was awarded to INA, one (Drava 3) to Orland Plc from Nigeria and four (Drava 4 and Sava 8, 9 and 10) to Vermilion Zagreb exploration.

Since the decision was expected in March, the schedule for negotiating production sharing agreements and signing the contracts will likely be pushed back; signing of the production sharing agreements is now expected by the end of 2015.

Krk LNG terminal

Following the tender for financial, technical and legal consultancy (excluding construction advisory) for the liquefied natural gas (LNG) terminal on the island of Krk, future operator LNG Croatia Ltd has announced that it has selected PwC, a consortium of connected companies from Zagreb, Italy and the Netherlands.

Meanwhile, an open-season procedure for parties interested in leasing the terminal capacity (four to six billion cubic metres) concluded on May 31 2015. According to LNG Croatia Ltd, 12 applicants have submitted bids.

Finally, on July 19 2015 LNG Croatia Ltd announced a tender for:

"the open procurement process for service preparation of tender documentation for the construction of the LNG terminal KRK and consulting services related to construction contract for LNG terminal KRK".

The principal is seeking advisory services, including CPV 7941000-1 (business and management consultancy services) and CPV 79100000-5 (legal services). These include:

  • preparation of tender documents for the pre-qualification of potential bidders for the performance of construction work, in Croatian and English;
  • evaluation of the submitted pre-qualification requests for participation, in Croatian or English;
  • preparation of tender documents for the performance of construction work, in Croatian and English;
  • evaluation of the submitted bids, in Croatian or English;
  • preparation of the International Federation of Consulting Engineers contract;
  • participation in meetings and negotiations, as well as all other services within the scope defined by the project task; and
  • consulting services during the contract realisation, according to the actual needs and individual requirements of the principal.

The estimated value is HRK7 million or approximately €900,000.

The selection criteria are:

  • bid price (30%);
  • specific knowledge and experience (40%); and
  • specialists (30%).

The deadline for the bid is July 30 2015.

For further information on this topic please contact Miran Macešic or Ivana Manovelo at Macešic & Partners by telephone (+385 51 215 010) or email (mmacesic@macesic.hr or manovelo@macesic.hr). The Macešic & Partners website can be accessed at www.macesic.hr.

Endnotes

(1) For further details please see "Licences granted for first Adriatic offshore exploration and exploitation tender".

(2) For further details please see "First oil and gas onshore tender".

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