Croatia awards six onshore oil and gas exploration licences in Pannonian Basin
Licensing rounds

Croatia awards six onshore oil and gas exploration licences in Pannonian Basin

On Thursday the Government of the Republic of Croatia adopted decisions on issuing licenses for the exploration and production of hydrocarbons at six onshore exploration blocks in Croatia. The foregoing is the result of the second onshore license round for the exploration and production of hydrocarbons launched in October last year.

The license for exploration and production in the Sava-07 exploration block was awarded to the Canadian company Vermilion Zagreb Exploration d.o.o., which is already performing exploration works in the area of Eastern Slavonia. INA – Industrija nafte d.d. was awarded exploration licenses for two exploration blocks, Drava-03 and North-western Croatia-01.

Two new companies plan to participate in exploration projects in the Republic of Croatia, the US oil company Aspect Holdings, LLC, whose subsidiary Aspect Croatia was awarded an exploration license for the Sava-06 exploration block, and the Croatian oil company Crodux derivati dva d.o.o., which will perform exploration works in Sava-11 and Sava-12 exploration blocks. 

The SA-6, SA-7, DR-3 and SZH-01 exploration blocks in the Pannonian Basin have already been confirmed as prolific by previous exploration, i.e. all elements of a hydrocarbon system are present and exhibit great potential for additional new exploration works aimed at identifying new hydrocarbon reservoirs. Previous geochemical studies of the Pannonian Basin indicated that 2 to 3 times more hydrocarbons have been generated than discovered to date. The remaining potential, that could not have been ascertained by measurements performed so far, could be identified in deeper formations and the so-called structural traps.

The SA-11, SA-12 and SZH-05 exploration blocks are located on the margin of the Pannonian Basin where small-scale exploration works have been performed, with these blocks remaining unexplored. Due to marginal results, the hydrocarbon potential of these blocks has not been extensively explored. New exploration works in these blocks will determine the hydrocarbon potential of this margin of the Pannonian Basin.

Three years after the signing of the contract, the first onshore license round has yielded the first results.

In July 2019, INA reported to the Ministry of Environmental Protection and Energy and Croatian Hydrocarbon Agency its commercial discovery of a gas deposit at the Severovci-1 well in the DRAVA-02 exploration block. A test in two gas saturated intervals measured the total volume of 53,000m³ gas per day.

The Severovci-1 exploration well is located in the Severovci exploration prospect, in the vicinity of INA’s Molve, Kalinovac and Ferdinandovac production fields. The well was drilled within Phase I of the Exploration Period in accordance with the Contract on the Exploration and Production Sharing of Hydrocarbons for the DRAVA-02 Exploration Block, signed between INA and the Government of the Republic of Croatia on 10 June 2016.

In early August 2019, the oil company Vermilion Zagreb Exploration d.o.o. informed the Ministry of Environmental Protection and Energy (MEPE) and the Croatian Hydrocarbon Agency (CHA) of its gas discovery in the first Cerić-1 exploration well, at the location of the same name in the SA-10 exploration block in the Vukovar-Srijem County.

The well has been drilled through several sandstone bodies, a reservoir at a depth between 1160 and 1167 m was discovered, and its deliverability was tested by performing such petroleum operations. The test was performed in order to determine the production capabilities of the reservoir.

During the test, approximately 400,000 m3 of gas per day were recovered from the well, which indicates outstanding reservoir productivity. Another reliable reservoir indicator is that no water was recovered during the entire well test. These exceptionally positive results will be used to further analyse and plan future development activities in this exploration block.

At the end of August, Vermilion notified the Croatian Hydrocarbon Agency about a natural gas discovery at the Berak location in the SA-10 exploration block. The discovery was confirmed by testing the Berak-1 exploration well, and further evaluation of all the data collected is ongoing.

25 new exploration wells are planned as part of the new cycle of onshore exploration for which the Government of the Republic of Croatia has awarded licenses. Adding to this the exploration already underway in Eastern Slavonia, there are plans to drill approximately 30 new wells in the Pannonian Basin over the next five years.

In recent years, the Republic of Croatia has been making significant efforts into further developing energy projects, with an emphasis on revitalizing domestic oil and gas production, and the first positive results and new players participating in the projects confirm that the Republic of Croatia is indeed a desirable and serious partner.