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Boosting oil and gas exploration and production

Boosting oil and gas exploration and production

Since MOL took control of the company in 2009, INA invested in oil and gas exploration and production in Croatia. Several discoveries in Croatia and in the Pannonian Basin, between Croatia and Hungary, have substantially improved energy security in the region.

Since 2003, when MOL became a strategic investor in INA, around HRK 23 billion (~EUR 3.1 billion) was invested into upstream oil and gas assets, and over HRK 4 billion (~EUR 538 million) specifically in Northern Adriatic fields. This resulted in record gas production in 2010-2011 from these gas fields.

Between 2003 and 2018, more than 3 billion cubic meters of proven gas reserves were added to INA’s reserve base through exploration and development activities in the Adriatic. At the same time however, oil reserves decreased from 103 MMbbl in 2012 YE to 58 MMbbl in 2018YE.

Under the 2003-2007 Initial Business Plan, annexed to the 2003 Shareholders Agreement and drafted under the full control of the Croatian Government, the focus of exploration activities was shifted to Adriatic offshore and international projects. EUR 207 million were allocated for these international projects, with only EUR 6.6 million allocated for onshore and offshore exploration activities in Croatia.

After MOL arrived at INA, even before taking over the management control in 2009, it championed Croatian exploration activities. After management control was taken over, MOL initiated further exploration projects on Croatian soil that resulted in three major discoveries – one of which is the best-producing well ever drilled in Croatia.

Cross-border explorations in the Pannonian Basin, between Croatia and Hungary, were also undertaken at the initiative of MOL in 2006 and 2007. The Zalata-Dravica and Novi Gradac-Potony joint explorations were both successful, and clearly illustrate the possibilities of good operational cooperation between INA and MOL. Full exploitation of domestic hydrocarbon reserves also greatly benefits regional energy security.

Today, INA runs extensive upstream operations in Croatia (in the Pannonian basin and the Adriatic Sea), and abroad in Angola and Egypt.

It is also important to note that INA had significant operations in Syria, but regarding these projects significant impairments were booked between 2013 and 2016.

In 2018 INA purchased ENI’s share in the Northern Adriatic offshore gas fields which was the biggest M&A transaction in the recent years.