Ivan Vrdoljak Needs a Lesson in Truth

February 4th 2015

Fed up with scientists, politicians, and citizens raising concerns about the proposed drilling plans in the Adriatic sea and lack of sufficient environmental standards, Croatian Economic Minister pulled out the cheap gas card again.

As reported in 24sata.hr “Hrvatska industrija može imati duplo jeftiniji plin, jer će onaj plin iz Hrvatske koštati duplo manje nego onaj koji uvozimo iz Rusije, rekao je ministar gospodarstva”


Croatia can have gas at half the cost because the gas from Croatia costs two times less than gas imported from Russia.

It may be true that production costs are cheaper, however according to the agreements with the Oil and Gas contractors, Croatia itself is entitled to 10% of the value of the extracted gas sold at market rate. From the AZU Contractor Additional Q&A

22. Regarding gas price obtained at delivery point (Article 16.3.1), can you briefly describe the price setting mechanism for gas in Croatia?
Gas prices in Croatia are liberalized and defined by market supply and demand. Usually, the Croatian price is determined as the nearest spot hub price + transport costs. The nearest international gas hub is CEGH at Baumgarten, Austria.

So yes, Marathon Oil, INA (MOL), OMV, ENI and Medoilgas will profit from the cheaper shallow-water extraction when they sell it on the market. But no, Mr. Vrdoljak, Croatians will not be getting gas at half-price and you know it.

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