Economy Minister Kavarić: Oil and gas exploration to reduce import dependence, create economic growth, new jobs, protect environment

Budva, Montenegro (10 March 2015) -- Transparency, progressive taxation, competition and lack of discretion are crucial principles defining the Montenegrin Government’s approach to oil and gas industry, Economy Minister Vladimir Kavarić said at the opening of the First Adriatic Oil & Gas Summit, which takes place on 10 - 11 March in Budva, Montenegro. 

"Transparency, which is reflected in defining the rules of the game, through laws and enabling regulations and publicly available documents, including also model contracts, to a maximum extent possible. Progressive taxation, precisely such tax policy model where the state is to collect so called resource only when a company starts operating with profit from activities ring-fenced to Montenegro. We believe that the competition is healthy in any field. Finally, we believe that discretionary decision-making is not the best solution, therefore we have tried and will continue to keep the discretionary decision-making at minimum possible level," Minister Kavarić explained.

He added that Montenegro is aware that it has to compete with other countries devoted to responsible management and efficient use of hydrocarbons.

"We are trying to create best environment that will attract the best, and we are striving to encourage competition in this business, as we also know that private companies show their best in terms of innovation, approache and delivery, when facing a competitive pressure," Economy Minister Kavarić underlined.

He said that this activity does not recognise national frontiers, as geology does not understand borders.

"Thus, a success of our neighbours is only going to amplify opportunities for Montenegro and for other neighboursas well, in attracting companies to take part in this sector. Exploration of oil and gas in Montenegroso far, as well as activities in the Adriatic, have indicate large prospectivity of the region. The basic prerequisites are proven for oil ang gas production to take place in the south Adriatic geological basin, while direct confirmation of this fact is the production in Albanian, Croatian and Italian part of the basin," Minister Kavarić noted.

When it comes to hydrocarbon exploration’s compatibility with Montenegro’s other development policies in the field of tourism and environmental protection, Mr Kavarić emphasised that an economy development, not even sustainable development as a central concept of our age, is not possible without the energy development.

"Thus, we have included standards for this area, which are even more demanding then generally applied environmental protection standards for other sectors of the economy," he underscored.

Croatian Economy Minister Ivan Vrdoljak, who also attended the Budva’s oil and gas summit, commended the Montenegrin- Croatian cooperation and the communication established between the two line ministries. As an EU member state, Croatia strongly supports the region on its European path, fully aware that the progress is achievable only if there are no outstanding issues within the neighbours, he stressed. 

Minister Vrdoljak added that Croatia will sign a contract on oil and gas exploitation by late May. This will be the first contract of that type in the history of the country, which will be a step forward towards energy independence of the country, which will enable fulfilment of its own needs, while creating opportunities for export.

Minister Vrdoljak commented on the current demands for a referendum on oil and gas exploration. He noted he would support a referendum on how to reduce the number of tankers with imported oil entering the Adriatic, as Croatia wish to reduce risks and protect the environment, adding there is no possibility to hold a referendum before signing contracts with companies.

Speaking of tourism, the Croatian Economy Minister said that Istra is the most famous tourist destinations in Croatia, and that the most gas has been pumped from these areas. He reiterated the Croatia has researched the oil potential of the Adriatic for 40 years, but now, through the process, the best technologies in the field of environmental protection will be implemented.

Croatia’s obligation, as a member of the EU, is to implement strict regulations in order to protect the environment. If there is any solution from the EU legislation, we will include it, Minister Vrdoljak concluded.

The Adriatic Oil & Gas Summit is organised by the Global Event Partners, specialist international event organiser in the oil and gas industry. The Summit is a unique opportunity for interested parties to attend such event, organised for the first time in Montenegro.