The Croatian government on Wednesday gave concessions to three companies - Croatian-Hungarian energy company INA, Nigeria’s OANDO PLC and Canada's Vermilion Zagreb Exploration to search and exploit energy sources in the Adriatic Sea.
The companies will operate in six oil and gas fields with a total area of around 15,000 km squared, with each company receiving between 2,100 to 2,500 km squared. INA and OANDO PLC will get one field each, while Vermilion will receive the remaining four.
The licences for exploration and exploitation have been given for two years, but they may be prolonged by a further three years.
If gas and oil has been found in sufficient quantities after five years, the companies may exploit the concession for 25 years.
Croatia’s Minister of Economy Ivan Vrdoljak previously informed the media that he expects drilling for oil on Croatia’s side of the Adriatic to start in the next 3-5 years.
“The Adriatic needs to be preserved from ‘dirty’ boats and this is the only way to have controlled energy sources,” he said.
The Vice Minister of Economy, Alen Leveric, said the licences were only “the basis for the beginning of negotiations with oil companies,” Balkan Insight reported.
Davor Stern, an oil expert and longtime head of INA, said he believes that the interest of the company for the exploration and exploitation of oil and gas on the Croatian mainland is "really good."
Stern added the results from land exploration could be a lot better than the results from marine research.
"I'm a big supporter of research on land, as opposed to drilling on the Adriatic. It also should not forget that the cost of research in the continental Croatian three times lower than the research of the Adriatic," Stern said according to Al Jazeera Balkans.
Last year, the Croatian government said it would grant exploitation and research rights to INA, Italian energy giant ENI and American firm Marathon Oil, but the government could not make a deal with Italian and American companies.
Offshore tender for gas and oil exploration and exploitation in the Adriatic seabed was launched in April 2014.
The offshore tender was closed in November 2014, while the government gave five companies licences in January 2015.
Some nationals are protesting against the exploration and exploitation oil and gas in the Adriatic Sea because of the damage to the environment and the people that live in the region. These plans will also affect tourism and travel in Croatia.
The government expects around 5 billion euros of investments to be made within a five-year period the after signing of the contract.
The government aims to reduce the unemployment of the country, which is currently around 18 percent.