First Oil and Gas Exploration Boat this Novemeber, First Oil Borehole at End of 2019

By , 05 Oct 2018, 14:09 PM Business
Illustration Illustration CdM/Portal RTCG

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October 5, 2018 - The first oil and gas exploration boat will sail into Montenegrin waters on 1st November, while we will have the first oil borehole at the end of 2019, said Vladan Dubljević, Director of Administration for hydrocarbon. Concessionaries are already paying the state a fee of about a million and a half per year, and real profit awaits us, claims Dubljevic.

Research in the past century has shown that oil and gas exists. Proof of this is the core boreholes that are located in the Depot of the Administration for hydrocarbon and are carefully guarded.

How big the natural resource is, its depth and where it is will be shown by serious investigations that received a green light three years ago with the publishing of the first tender. In order to establish a firm legal basis, the Ministry of Economy has used the experience of Norway, which is the world's fifth-largest oil export company, earning about $40 billion a year.

Three groups of companies applied for the tender and the government signed the first contract with the Italian-Russian consortium Eni-Novatek in September 2016. The second contract was signed with the Greek company Energean Oil and Gas, which last year released a report by the Independent Assessor from the “Competent Persons Report – CPR”, claiming that Montenegro has 51 billion cubic meters of gas in the seabed and 144 million cubic meters of liquid resources, which is about 438 million barrels of oil. The data refers to the 330 km square meters in the Ulcinj area where concessions were given. 

"These are only rough estimates based on the results of research in the surrounding area and drilling and exploitation in the surrounding area of the Albanian, Croatian and Italian seabed," says Branislav Glavatović, engineer of geophysics. The embarkation of the first seismic survey vessel, which will confirm or deny such analyses, is expected on the first of November, and the first borehole is planned by the end of 2019. Although companies are already paying the state a fee of around one million and half per year for the areas they are exploring, real profits await us, says Dubljevic.

"At the moment of production, we share this profit and we have defined our system so that it is based on concessional compensation plus a special profit tax. A division of 62 to 68 percent in favor of the state of Montenegro," said Dubljević, Director of the Administration for hydrocarbons. 

The Directorate for hydrocarbons and the Government are preparing to publish another tender. Unlike the previous one, which petroleum companies applied for, and which besides exploration would be able to process and sell gas and oil, the next tender is intended only for those who will use contemporary technologies to determine precisely whether the black gold exists and in what quantity in our seabed areas are still unexplored. "When these results are obtained, the data will be offered to oil companies, and we will, as a state, divide the profit from that with geophysical companies. They will make an assessment of this area and if we find a potentially new space in which there is oil and gas, we will announce a new tender," said Dubljevic. In search of oil and gas, Montenegro is still behind in relation to the countries of the region.

"I think Italy has managed to make over 1,500 boreholes, it has about 130 active, around thirty platforms, you have gas platforms in Croatia, Albania already does it and Greece has focused its west coast on research. In my opinion, Montenegro should not give up such opportunities," said economist analyst Vasilije Kostić.

Montenegro’s search for oil has lasted for more than 100 years. For the first time in history and the first one in the region, King Nikola in 1914 entitled the Dutch businessman J. Kocare to search for petroleum in the vicinity of Skadar Lake. The first concession was secured on February 20th of that year by the publication of the law in the Official Gazette of the "Voice of Montenegrins".

The vision of the Dutch but also of Montenegro soon disappeared due to the beginning of the First World War, but this was not the end, but the beginning of our search for fossil fuels.

Text by CdM/Portal RTCG, on October 5th, 2018, read more at CdM

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