Prime Minister Tihomir Oreskovic and Economy Minister Tomislav Panenic on Friday signed contracts on hydrocarbon exploration and exploitation sharing on five land fields with representatives of INA and Canada's Vermilion Energy company, and the estimated value of the investment is around 500 million kuna (approx. EUR 66.66 million).

"The contracts have secured half a billion kuna of new investments, and the amount can be higher if new quantities of oil and gas are discovered," PM Oreskovic said after the signing ceremony, noting that oil would be processed in Croatian refineries.

He said that the investment proved that Croatia was open to investments and that a positive investment climate was being created.

"This confirms that the energy sector is important for Croatia's development," said the PM.

Economy Minister Panenic said the contracts referred to the parts of Croatia that had always sought and wanted investments.

We can say that exploration work will be conducted in practically all Slavonian counties, said Panenic, who expects that local businesses will benefit from the contracts.

He said that in July a new tender would be published for exploration on ten more land fields and that their value could be around one billion kuna.

Vermilion Energy CEO Anthony Morano thanked PM Oreskovic and the Croatian government for support in the realisation of the investments.

Vermilion is honoured to have become a part of the Croatian economy and to be given the opportunity to become a long-term investor in Croatia, Morano said, adding that there was great potential for onshore hydrocarbon exploration and exploitation and that the most advanced technologies would be applied in the process.

INA CEO Zoltan Aldott said INA was satisfied with the contracts because it had been recognised as a reliable partner and "an old partner".

This will launch a new cycle of investment in the exploration of new fields in Croatia, which is important both for the company and for the entire economy, said Aldott.

Answering questions from the press, Economy Minister Panenic confirmed that plans for oil and gas exploration in the Adriatic had been given up.

I can confirm that oil exploration in the Adriatic is not acceptable, said Panenic.

Asked by a reporter if the government had the right to sign contracts like this given the current government crisis, PM Oreskovic said that he did not see any problem with that.

It is in Croatia's interest to increase investments and I see no problem with that, he said.

He said that the current government worked well and should stay, citing as an example the project for an LNG terminal on the island of Krk.

That project has been discussed for ten years, Oreskovic said, adding that his government had defined a strategy for that EUR 100 million project in four months and put it on the government's agenda so that its implementation could start.

Oreskovic said that his government's good work was evidenced not only by energy projects but also by the Krizevci-Dugo Selo railway project, worth EUR 200 million, and the Peljesac bridge project, an investment worth EUR 430 million for which, he said, a tender would be published in a month's time.

This past Wednesday the government gave its consent for contracts for onshore hydrocarbon exploration and exploitation sharing at six locations.

The government today signed a contract with INA on one exploration field (Drava 2) and contracts with Vermilion Energy on four exploration fields (Drava 4 and Sava 6, 9 and 10), while a contract with the Nigerian company Oando PLC on one exploration field (Drava 3) will be signed next week.

Minister Panenic said that the exploration period was five years and that if oil and gas deposits were found, a 25-year period of exploration would start.

He said the contracts envisaged investments worth EUR 88 million while possible net revenues for the state budget, in case exploration started, were estimated at between HRK 3.4 billion and 6.8 billion annually.

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