Croatia’s call for foreign investment in the development of its largely untapped oil and gas resources recently expanded to include onshore development.
In mid-July, the Croatian Hydrocarbons Agency announced the country would be opening its first onshore licensing round, making available 14,600 square kilometers (a little more than 5,630 square miles) divided into six blocks across the Drava, Sava and East Slavonia regions.
This followed the news tied to AAPG’s Annual Convention and Exhibition (ACE) in Houston earlier this year, where representatives of the Croatian Hydrocarbons Agency formally announced the country’s first offshore license round. That opened April 2 and included about 37,000 square kilometers (about 14,000 square miles) divided into 29 exploration blocks.
Ivan Vrdoljak, Croatia’s minister of economy, issued the July announcement of the country’s first onshore license round, which is the first of three tenders for onshore development, at a press conference in Osijek in eastern Croatia.
“In spite of the fact that Slavonija region was the main well field for crude oil and natural gas in the last 40 years, the real potential was not accomplished,” he said in a release.
That unrealized potential is demonstrated, he explained, by a simple comparison between Hungary and Croatia, which have similarly-sized onshore areas across the Pannonian Basin – but Croatia has only 33 percent of the number of onshore exploratory wells in Hungary, and less than 52 percent of the recoverable reserves discovered to date.
“However, under-explored but proven potential and geostrategic location gives Croatia fully the right to insist on becoming one of the most interesting countries on the map of oil and gas business in this part of the world,” Vrdoljak added.
A Growing Interest
Vrdoljak noted that goal is validated by the interest already shown by major oil and gas players following the April announcement at ACE.
“Despite the fact that the Croatian side of the Adriatic has been quite under explored compared with other countries in the region, more than 40 global companies already visited the offshore Data Room and showed their interest to participate in the license round,” Vrdoljak said.
“Croatia’s onshore is a well-known area with long lasting tradition of E&P, but its potential is yet to be fully utilized,” he added.
“Considering that hydrocarbons have been proven and are being actively produced in every region of the Pannonian basin onshore, Croatia proves a working deep hydrocarbon system in the region. Preliminary analysis of the seismic and other available data shows that the Pannonian contains significant remaining potential,” said Barbara Dorić, president of the Croatian Hydrocarbon Ageny’s management board, who also was at ACE to explain the bidding details.
In 2013, onshore production averaged 12,600 boe/d of gas and 10,900 bbl/d of oil and condensate, she said.
She said the six available blocks range from 2,100 to 2,600 square kilometers (about 810 to 1,000 square miles).
According to the current draft of the production-sharing agreement, Croatia would retain 59 percent of natural gas resources found and 57 percent of the oil deposits, while the exploration company would keep the rest, she said.
Dorić invited potential investors to visit the CHA’s online Data Room, which has legacy seismic data covering about 7,000 kilometers, 1,400 square kilometers of 3-D legacy seismic data covering 1,400 square kilometers and 500 wells located in the Pannonian Basin.
The Pannonian Basin is an integral part of the Alpine mountain belts of east-central Europe, completely encircled by the Carpathian Mountains to the north and east, the Dinaric Alps to the south, and the southern and eastern Alps to the west.
Studies using subsurface data have shown that the Pannonian area was extensively deformed by Mesozoic thrusting and subsequently disrupted by a complex system of Cenozoic normal and wrench faults. Thus, the Pannonian massif has undergone several types of deformation, which are partly hidden by a thick sequence of sedimentary rocks of Neocene-Quaternary age.
The Pannonian Basin is a system of small, deep basins separated by relatively shallow basement blocks. The Neogee-Quaternary sedimentary rocks exceed seven kilometers in thickness in some areas, and the basin system (including the Transylvanian basin) is about 400 kilometers from north to south and 800 kilometers from east to west. The standard interpretation is that it is a Mediterranean back arc extensional basin of the middle Miocene age.
When Croatia’s Deputy Minister of Economy Alen Leveric announced the offshore licensing round at ACE, he said it was part of a broader effort to attract foreign investment to the country through a series of new legislative proposals, including the 2013 creation of the Croatian Hydrocarbons Agency, as well as Croatia’s recent membership with NATO and the European Union.
“Joining NATO and the EU means security and stability for investors that come to Croatia,” said Leveric.
He emphasized that most of the infrastructure already exists in Croatia to develop and transport oil and gas, and the prior bureaucratic hurdles were the only significant impediments to exploiting the country’s hydrocarbon resources.
“We put special emphasis on encouraging and strengthening the upstream hydrocarbon sector as one of the priorities of the government of Croatia,” he said.
“Now, everything else is up to you,” Leveric added.
The offshore license round is scheduled to close Nov. 3. The onshore round will close Feb. 18, 2015.