- Title: CROATIA-OIL With eyes on Adriatic oil potential, Croatia weighs threat to tourism
- Date: 3rd June 2015
- Summary: PULA, CROATIA (MAY 29, 2015) (REUTERS) SEA AS SEEN FROM COAST SHRUB ON BEACH VARIOUS OF AERIAL SHOTS OF NATURAL GAS RIGS OFF ADRIATIC COAST ZAGREB, CROATIA (RECENT) (REUTERS) (SOUNDBITE) (Croatian) CROATIAN ECONOMY MINISTER, IVAN VRDOLJAK, SAYING: "Today Croatia has 12 natural gas platforms, in the near vicinity of the coastline of Istria, the most developed tourist region
- Embargoed: 18th June 2015 13:00
- Keywords:
- Location: Croatia
- Country: Croatia
- Topics: General
- Reuters ID: LVAAVVJ8PSKVHOS8RVMGX0CFV2VI
- Aspect Ratio: 16:9
- Story Text: When Croatia announced in 2013 it would set a tender to explore for oil and gas in its pristine Adriatic waters, the government evoked the hydrocarbon riches of Norway to win over the plan's many detractors.
"If it's not dangerous for Norway or Scotland, it shouldn't be dangerous for us," Prime Minister Zoran Milanovic said in April, defending an effort he hopes could help turn around Croatia's economic fortunes after six years of recession.
Milanovic was responding to public concerns that the project is a high-risk gamble that may forever change the way of life on Croatia's more than 1,000 islands, hurt its lucrative tourism industry and harm the environment.
Croatia produces around 600,000 tonnes of oil per year, barely 20 percent of its needs, and some two billion cubic meters of gas, or 66 percent of annual consumption.
The government believes it can produce more, though how much more will only be known once exploration gets under way in the next three years, with exploitation not likely before 2019.
Economy Minister Ivan Vrdoljak told Reuters the government was banking on around 1 billion euros ($1.12 billion) of investment and several thousand jobs in the first three to five years.
He added that concerns for the effect on tourism industry are unfounded, as there are already natural gas platforms in the northern Adriatic, off the coast of Istria.
"Today Croatia has 12 natural gas platforms, in the near vicinity of the coastline of Istria, the most developed tourist region of Croatia. Hundreds of thousands of tourists come to Istria every year, and none of them has ever seen these platforms. So there is absolutely no effect on tourism. Because the only platforms that we already have are in the most developed tourist region, and I haven't noticed any sign that this fact has damaged the tourist industry," Vrdoljak added.
The government hopes the country's oil and gas potential can turn that around: preliminary studies suggest reasonably large amounts of natural gas in Croatia's northern Adriatic, where it is already extracted, and oil in the south.
In January, Croatia awarded ten oil and gas exploration licenses: seven to a consortium of Houston-based Marathon Oil and Austria's OMV, two to INA, co-owned by Croatia and Hungary's MOL, and one to a consortium made up of Italy's ENI and London-based Medoilgas.
The project also fits with Croatia's ambitions of becoming an energy power in the region, with plans also under way to build a liquefied natural gas terminal on the island of Krk.
"I think Europe as a whole has decided to use all of its energy potential, in order to reduce the supply risk and energy imports and to improve the competitiveness of European -- and therefore Croatian -- industry. And for the last 20 or 30 years we have not used our potential to explore and exploit hydrocarbons, in both sea and land areas, like our neighbouring countries have. We started this process, not to turn Croatia into an energy exporter, but into a country that could help in reducing energy imports in southeast Europe. This is not just a Croatian project, it is a European project," Vrdoljak said.
Similar plans are afoot in Adriatic neighbours Montenegro and Albania.
Across the sea, Italy has been pumping oil and gas from the seabed for decades -- Italy extracted 521,742 tonnes of crude oil from the Adriatic in 2014, or 69 percent of its total offshore extraction.
But with contracts expected to be signed with five selected concessionaires by July, opposition from local and international environmentalists, politicians and even pop stars -- expressed in the campaign "SOS for Adriatic" -- is only growing.
"Italy already has six oil rigs (in the Adriatic), and they have plans for more. The process that Croatia is in now, having a tender looking for investors, is also under way in Montenegro, and there's a similar thing going on in Albania. What we keep pointing out is that this is about a single Adriatic sea, which is being exploited to the fullest. This is about an autistic sort of policy by countries, which entails a maximum level of exploitation without considering cumulative consequences for sustainable resources. This puts the existing economic mainstays in the Adriatic in jeopardy, primarily tourism and fishing," head of an enviromentalist NGO "Green Istria", Dusica Radojcic, said.
Although the oil rigs must be at least 10 km away from the mainland and 6 km from any island, environmentalists are still concerned as such proximity would prove disastrous in case of any accidental oil spill.
"The official (Croatian government's) plan for exploring and exploiting hydrocarbons in the Adriatic allows oil rigs to be located only 6 kilometres from islands. This is a very serious issue, as we have no way in Croatia to quickly react and prevent the spreading of a potential oil spill so close to our islands," Radojcic added.
Tourism has boosted Croatia's image since the country of 4.3 million people broke from Yugoslavia in 1991.
In 2014, the year after Croatia became the newest member of European Union, 12 million visitors generated around seven billion euros in revenues, or around 17 percent of national output.
But that has not been enough to keep the economy growing.
Output has contracted by 13 percent since 2009, driving up unemployment to almost 20 percent.
Although the government says it is determined to go on with the project, critics appear determined to block the enterprise, no matter what the economic windfall might be.
Croatia's opposition green party, Orah (Walnut), plans to petition the government in June with demands for a new environmental study and a public debate, backed by the main opposition HDZ.
Orah's leader, Mirela Holy, said the Adriatic, a closed and shallow sea, could not be compared to the drilling in the North Sea or Gulf of Mexico, as any disaster off the coast of Croatia would be much more difficult to clean up and could potentially destroy the coastal economy.
She added that comparisons with the operations already taking place off Italy were "pretty pointless".
"There are no islands there, the coastline is not made of karst there, the coast is mostly muddy and sandy, which is far easier to clean up in case of an oil spill. And besides, Italy's Adriatic coast does not have the same kind of tourism profile compared to ours, as ours greatly depends on natural beauty and the pristine Adriatic sea," Holy said.
Greenpeace and other eco-groups also hope to force a binding referendum against drilling, although a government plan to change the rules on how to collect the necessary 400,000 signatures is likely to put up serious obstacles to its success. - Copyright Holder: REUTERS
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