Ex-Minister Holy: Oil Companies Giving up on Adriatic Drilling Because They Do Not Believe Croatian Government

Total Croatia News

Why have Marathon Oil and OMV pulled out of the Adriatic Drilling project, despite being granted 7 of the 10 licences? A view from Mirela Holy, former Minister of Environmental Protection and Environment, published in Vecernji List.

The decision by almost all potential participants not to take part in the exploration of the Adriatic in search of hydrocarbons is without a doubt a big slap in the face of not only minister Vrdoljak, who presented the project as his most important idea, but also of prime minister Milanović and the whole coalition government which unanimously stood behind this project, writes Mirela Holy, former minister for environmental protection. These days, many have speculated about the reasons for the abandonment of the project, and we have heard many potential reasons – low oil prices, unsettled borders with the neighbors, Iraq’s oil, fear of Croatian “green extremists” who would make investors’ lives miserable… Some of the minister’s and the prime minister’s friends in media are in tears because of this turn of events, while some right-wing media are enjoying this political debacle of the economy minister and the government. The minister is trying to project optimism and has said that he expects great response from companies for the new round of competition which he plans to announce this fall. It seems that he had not had enough humiliation.

Many think that, as a loud opponent of this project from the very beginning, from illegal and potentially corruptive contract with Spectrum for 2D seismic survey of the Adriatic, I should be delighted now because it has been shown that I was right when I claimed that this project was being implemented contrary to the public interest, unprofessionally and sloppily. I could gloat in front of everyone who made fun of me as unprofessional “green Taliban”, including some extremely frothy academics and experts. I could say that the “green Taliban” was right when she argued from the outset several key things: current research of INA and its partners had not indicated abundant oil reserves in the Adriatic Sea that would be profitable with the current oil prices, while the risks for the Adriatic would be huge; the research suggested possible gas reserves in the northern Adriatic; despite advances in technology, the geological structures do not change and cannot provide significant differences in comparison with the already established reserves; 2D and 3D seismic surveys are always carried out through a public tender, and not under the guise of “scientific” research; the proposed agreement between the government and oil companies was extremely harmful for Croatian interests. But neither I nor anyone else in Croatia has any reason to gloat over this developments, because, despite the debacle, nothing has really changed. The incapable, incompetent and potentially corrupt minister will continue to be a minister. The incompetent, disinterested and Wikipedia-philosophically minded prime minister remains the prime minister and the government which unanimously supported the project, including the worst minister of environmental protection that Croatia ever had, will not be reshuffled. Croatian citizens who like to stress out because of different political affairs are not excited and disgruntled, and members of parliament who voted against interpellation do not have red faces from embarrassment and do not hide from the media and the public. All this shows that there is no room for triumph and jubilation, but only sadness and resignation.

We live in a society where the only stable point is an erosion of political values ​​and complete non-recognition of the idea of ​​the public interest and politically responsible behavior. In any other country with developed democratic standards, it would be absolutely impossible that, after such a debacle with the implementation of the “most important” project, the minister continues to be a minister and announces a new cycle of wasting public money with the implementation of another foolish competition. No one is asking the government and the prime minister how much money was spent to date on this project and how much they are still planning to spend. No one is asking the government for the accountability for the waste of money and time. No one is asking the government why it is still hiding the agreement between the Ministry of Economy and Spectrum and why it still hasn’t answered my parliamentary question posed in November 2014. No one is asking the government in whose interest was it to propose the agreement according to which Croatia would earn between 14 and 30 percent of income from hydrocarbons and who is the author of such an agreement. Those who think that I exaggerate when I accuse the minister and the government of corruption should explain how is this agreement in the public interest. To be honest, I do not care if the person who advocated such an agreement is corrupt, incompetent or has diminished intellectual capacities, but they have proven that they cannot be ministers in a government.

It is my belief that the companies have withdrawn from the project because they realized that the government is so incompetent that it will not be able to implement even this project, which is so damaging to Croatian interests, and that they are better off getting out of the project in which the possible deposits of oil are unproven, while the damage to reputation with an epilogue of criminal charges is a very likely option. According to publicly available draft of contract it is clear that, contrary to the claims of the government and the Agency for Hydrocarbons, according to which Croatia would receive about 55 to 60% of revenues from the hydrocarbons in the Adriatic, we could expect that in the most unfavorable, but the most likely case, we would make a profit of 14%. In the best scenario, profit for Croatia might be between 25 and 30 percent of total income, but that scenario is highly unlikely. The probability of finding large quantities of oil, which is necessary for the most favorable scenario to occur, is just 3-5%. The proposal does not mention compensation for indirect losses in the event of an accident (loss of profit from tourism, fisheries and aquaculture). According to the agreement, the companies do not have the obligation to use the infrastructure of Croatia for transport of oil and have no obligation for the employment of human resources from Croatia. The contract does not provide an option for the Republic of Croatia to enter into a partnership in case particularly rich reserves are found. It is clear that the proposal does not protect the interests of Croatia and its citizens, and that it was realistic to expect the indictments which even our State Attorney’s Office could not forever keep in a drawer.

It is sad, too, that nobody in Croatia is asking the government for what exactly has it spent three years of its term and how much money was “squandered” on the procedures and studies related to the hydroelectric plant Ombla. Three out of four expert auditors in the first half of 2012, while I was the minister, advised the government to abandon this economically and environmentally extremely harmful project. But the government decided to make a major assessment of ecological acceptability and to spend a lot of money. And now it gave up on that insane project and boasts that it is sensitive to the protection of nature?! Also, I’ll be a prophet and say that nothing will come out of other “strategic” project of the government, thermal power plant Plomin C because that project is harmful to the Croatian economic and energy interests. HEP is negotiating with the Japanese consortium convicted of bribery in several countries about the guaranteed price for the purchase of electricity from the future plant at a price between 70 and 120 euros per MW. The current market price is about 35 euros per MW, so it is evident that this project is not in the interests of the national energy company. Not to mention the fact that the conclusion of this type of preferential agreement is prohibited pursuant to the provisions of the 3rd European energy package that we have implemented in our laws. Unfortunately, the government does not want to hear these arguments that have nothing to do with being “a green extremist”. All of these arguments have to do just with common sense and conviction that the duty of politicians is to work in the public interest. The whole world is turning towards “green” transition. Even our media published the news that the administration of Barack Obama plans to push the climate package according to which the United States will reduce emissions of CO2 equivalents by 32% by 2030. Although this is lower than the European targets, it is a dramatic turnaround for the US administration. The reason is the knowledge that if we do not do this we will no longer exist. In addition, the green transition is an opportunity for a new business cycle. This is proven also by a strong turnaround of Rockefeller specifically towards renewable energy sources.

If our ministers and the government were to raise their eyes from their particular interests and the desire to favor the lobbies close to them, they would realize that the world is changing, and that it has already changed to a large extent. They too must change. And so, at the end, I ask Quo vadis, primus minister? Do you want for the history to remember you as the last European fossil prime minister?

View original article in Vecernji List.


Subscribe to our newsletter

the fields marked with * are required
Email: *
First name:
Last name:
Gender: Male Female
Please don't insert text in the box below!

Leave a Comment