The Government of Croatia has adopted a bill on the exploration and production of energy georesources. The government expects the law would establish modern and unified management of all key energy georesources.
The law on the exploration and production of energy georesources will be a strategic piece of legislation through which Croatia will, for the first time, regulate the management of all key energy georesources in a unified manner, according to the Croatian government.
It includes oil, natural gas, geothermal waters, geological formations for the storage and injection of carbon dioxide and gases, as well as the utilization of other fluids that may be found underground, Minister of Economy Ante Šušnjar pointed out.
He believes that the introduction of a single legal framework creates more favorable conditions for investment in hydrocarbons.
The legislation is opening the way for a more active role for the state in specific projects
In addition to the existing exploration and production sharing agreement, a royalty model is introduced. According to the government, a more active role for the state in specific projects is also enabled, through the participation of the Croatian Hydrocarbon Agency or state-owned companies.
Different bidding models are also being introduced: aside from the regular model, one novelty is a special tender for exploitation, together with multiple models for initiating the procedure at the request of existing rights owners, provided that the legal conditions are met.
A special emphasis is placed on geothermal energy, with the aim of increasing investments and facilitating the development of local heating and electricity generation projects, the government explained.
The law also regulates geological storage of CO2 in line with European rules, thereby opening up space for carbon capture and storage (CCS) projects and new high-value-added investments.
Parallel use of the same area for different energy georesources is enabled
“A large number of existing wells and facilities are being given the opportunity for repurposing into geothermal projects, CO2 storage, and other applications. A parallel and successive use of the same area for different energy georesources, for example, hydrocarbons, geothermal energy, or carbon dioxide storage is also enabled, which represents a completely new developmental concept for managing underground potential,” Šušnjar said.
The goal is to enable the revitalization of production fields at the end of their production life.
It would extend the production, increase the utilization of domestic reserves, reduce costs, and accelerate the development of new projects, Šušnjar added.
Croatia is very active in the development of CO2 storage and geothermal potential.
