Strategic Study of Environment Impact of the Framework Plan and Program of the Onshore Exploration and Production of Hydrocarbons

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Non-Technical Summary

Zagreb, July 2015

Consortium: Elektroprojekt d.d. STUDY IMPLEMENTERS: Alexandera von Humboldta 4, 10 000 Zagreb Ires ekologija d.o.o. za zaštitu prirode i okoliša Prilaz baruna Filipovića 21, 10 000 Zagreb

STUDY LEADER: Mr.sc. Zlatko Pletikapić, BEng

ASSISTANT STUDY LEADER: Mirko Mesarić, dipl. ing. biol..

COORDINATOR: Jelena Likić, prof. biol.

Table of Contents

1. Description of the Framework Plan and Programme ...... 1 2. Main objectives of the Framework Plan and Programme ...... 2 3. Overview of the previous onshore exploration and production of hydrocarbons...... 2 4. Technical aspects of exploration and production of hydrocarbons ...... 3 5. Environmental Impact of the Framework Plan and Programme ...... 7 6. Environmental protection measures ...... 22 7. Environmental monitoring ...... 28 8. Conclusions and recommendations ...... 29

Strategic Environmental Impact Study under the Framework Plan and Programme for Onshore Exploration and Production of Hydrocarbons

1. Description of the Framework Plan and Programme

The Strategic Study analyses the draft Framework Plan and Programme for the Onshore Exploration and Production of Hydrocarbons (hereinafter: the FPP). A Main Assessment of the Acceptability of the FPP for the Ecological Network shall also be carried out within this strategic assessment, pursuant to the Decision of the Ministry of Environmental and Nature Protection. The FPP includes the continental region of the Republic of Croatia with a surface of approximately 52 000 km2 and it covers an area in which hydrocarbon exploration and production related data have already been recorded. The onshore hydrocarbon exploration and production area which is the subject matter of the first tender procedure is a part of the Croatian continental area of approximately 15 000 km2. It is divided into 6 blocks (DR-02, DR-03, DR- 04, SA-08, SA-09 and SA-10) varying from 2 100 to 2 600 km2 in size in the area of the river Drava, Eastern Slavonia and the river Sava ( (Key: Blocks from the First Onshore License Round; Remainder of mainland Croatia to be covered by the Strategic Environmental Impact Assessment; Part of mainland Croatia that will not be covered by the Strategic Environmental Impact Assessment; Defined onshore hydrocarbon production fields (excluded areas) Figure 1). In accordance with the FPP, the flow and the scope of the activities are divided into the exploration and production period. The exploration period shall include exploration activities which include primarily 2D and 3D seismic survey acquisition and exploratory drilling, as well as many other analytical studies the joint purpose of which is to collect geological and geophysical data with the aim of obtaining accurate hydrocarbon potential assessment and recognition of geological structures (geological prospecting, gravity, geochemical, magnetic, magneto-telluric, transient electro magnetic and satellite gravity surveys, environmental baseline survey prior to the commencement of works and the environmental impact assessment of works). Pursuant to Article 19, paragraph 3 of the Act on Exploration and Production of Hydrocarbons (Official Gazette 94/13 and 14/14) the exploration period shall last up to 5 years, with the possibility of two extensions of 6 months. Following the expiry of the exploration period and provided the assumptions under the Act on Exploration and Production of Hydrocarbons (Official Gazette 94/13 and 14/14) for direct grant of a concession have been fulfilled, the production period shall commence and last 25 years, with a possibility of extension. During the production period the following activities shall be carried out: development of the reservoir development studies, development drilling and well completion, construction of production plants and, finally, production of hydrocarbons.

Strategic Environmental Impact Study under the Framework Plan and Programme for Onshore Exploration and Production of Hydrocarbons

(Key: Blocks from the First Onshore License Round; Remainder of mainland Croatia to be covered by the Strategic Environmental Impact Assessment; Part of mainland Croatia that will not be covered by the Strategic Environmental Impact Assessment; Defined onshore hydrocarbon production fields (excluded areas) Figure 1 Hydrocarbon exploration and production blocks published in the first public tender procedure and the remaining continental area to be included in the SEA procedure (source: Decision on the implementation of the strategic environmental assessment of the Framework Plan and Programme)

2. Main objectives of the Framework Plan and Programme

The FPP provides for the actions to be carried out in the continental area of the Republic of Croatia during the exploration and production period. The FPP is developed with the aim of accurate monitoring of the activities concerning onshore exploration and production of hydrocarbons, issuance of licences, conclusion of agreements, determination of fees, as well as quality inspection, monitoring and foreseeing of the status of onshore hydrocarbon reserves, as determined under the Act on Exploration and Production of Hydrocarbons (Official Gazette 94/13 and 14/14). 3. Overview of the previous onshore exploration and production of hydrocarbons

The onshore exploration and production of hydrocarbons in the Republic of Croatia has been taking place for decades. The first Croatian oil field Gojlo was discovered in 1941 with the use of deep drilling methods, while the first Croatian gas field Bujavica was discovered in 1917. 45 oil fields and 30 gas fields have been installed and started operating in Croatia in the period from 1952 to this day. A total of 106 million tonnes of oil, around 9 million tonnes of condensate and 74 billion m3 of natural gas have been recovered. Around 4 500 exploratory and development wells have also been developed, as well as approximately 1 200 production oil wells and 200

Strategic Environmental Impact Study under the Framework Plan and Programme for Onshore Exploration and Production of Hydrocarbons

production gas wells. The largest annual recovered oil amount in Croatia was recorded in 1981 and it amounted to 3 140 777 tonnes. Also, the largest recovered natural gas amount of 2 176 657 000 m3 was recorded in 1989. Large onshore oil fields in the Republic of Croatia are the following: Beničanci, Stružec, Žutica, Šandrovac, Ivanić, Lipovljani, Jamarice, Đeletovci, Jagnjedovac and Bilogora; large onshore gas fields in the Republic of Croatia are: Molve, Bokšić, Kalinovac, Stari Gradac and Okoli. 550 exploratory wells have been developed in the Croatian continental area. The location of the existing production fields and exploratory wells is shown in figure 2.

Figure 2 Positions/locations of exploratory wells and production fields (source: Croatian Hydrocarbon Agency)

4. Technical aspects of exploration and production of hydrocarbons Technology of well drilling The execution of mining activities and/or construction of mining facilities and plants require the drafting of a mining project, in accordance with the Mining Act (OG No. 56/13 and 14/14). Therefore, mining activities involving drilling and testing at each specific location of an exploration or production well must be carried out according to the approved mining project in accordance with the legislation. A Simplified mining project of the exploration well is made for the drilling and completion of a new well and mining activities carried out on the well. Excerpts from the spatial planning documentation confirm that the project is based on the county, municipal or town plans. Except for the excerpts from graphical representations, municipal and town plans also provide for the possibility of a spatial intervention based on their general implementing provisions for plan categories not shown graphically (unclassified roads and paths, local utility networks and lines). For the purpose of drilling the well, a typical mining drilling plant designed for onshore activities shall be located at the working area of a well (Figure ). The choice of the rig is dependent on the planned depth of the well. For example, the National-402 drilling rig, which can be used for drilling wells of up to 4000 m in depth has the following features: derrick working load of 280 tonnes (on the hook) with 12 ropes, rig strength of 750 kW (drawworks), height

Strategic Environmental Impact Study under the Framework Plan and Programme for Onshore Exploration and Production of Hydrocarbons

of the L. C. Moore tower: 44.5 m + substructure of 7.6 m, with a total of 52.1 m (top of the derrick), base of the derrick approx. 20 x 10 m (derrick – rig substructure) and a storage facility for 4000 m of drillpipes 127 mm (5“) in diameter. A drilling rig is installed/dismantled at the site. Moving and installing a drilling rig takes between 10 and 13 days depending on the distance of the site to which the rig is transported.

Figure 3 Examples of drilling rigs (source: http://www.crosco.com/index.php/drilling-services.html))

A drilling rig generally consists of a bearing structure – the derrick, block and tackle, drawworks, prime movers, gear-boxes, top drive, rotary table, mud pumps, swivel, system for mud preparation and conditioning, system for protection against blowouts ( blowout preventer – BOP), drill tools (kelly, rigs and drill collar), drill bits and other tools (Figure 4).

Strategic Environmental Impact Study under the Framework Plan and Programme for Onshore Exploration and Production of Hydrocarbons

Key: 1. Drill bit 2. Sub: drill bit – drill collar 3. Drill collars 4. Drilllpipes 5. Sub: drilllpipe – kelly 6. Kelly or top drive 7. Blowout preventer 8. Flexible mud hose 9. Swivel 10. Rotary table 11. Drawworks 12. Engines with gear-boxes 13. Mud pumps 14. Mud pits 15. Hook and travelling block 16. Derrick 17. Drill line 18. Crown block

Figure 4 Shematic representation of a drilling rig (source: Matanović, 2007) Well completion

The production phase commences following the exploration phase (completion of exploration operations and confirmation of hydrocarbon reserves). According to the Mining Act (OG No. 56/13 and 14/14), hydrocarbon production includes hydrocarbon transport, when it is technologically connected to the approved production fields. Production wells must be drilled so that the production can commence; they need to be completed with underground and surface equipment and a collection and transport system needs to be built. Drilling rigs are located at the site of the new well during the drilling of production (development) wells, as well as during the drilling of exploration wells. One or more wellbores slanting from the vertical and with different orientations underground can be drilled from the same work area of the well. The construction of exploration wells has been described earlier, and the construction of production (development) wells constitutes a similar process. The construction of a development well is followed by its completion, representing a connection between the well construction and production phases. Completion of the well for production is carried out using a workover rig (derrick height is about 29 m). During the period of hydrocarbon production, and for the purpose of carrying out necessary mining activities in the well, a workover rig is also placed on the well site from time to time.

Strategic Environmental Impact Study under the Framework Plan and Programme for Onshore Exploration and Production of Hydrocarbons

Depending on its purpose, there are different types of well completion (Figure 5). . Flowing oil and gas well . Pumping oil well . Gas lift oil well . Appraisal well . Water injector well . Abandoned well

Pumping oil well

Gas lift oil well

Appraisal well Water injector well

Figure 5 Types of wells

Strategic Environmental Impact Study under the Framework Plan and Programme for Onshore Exploration and Production of Hydrocarbons

5. Environmental Impact of the Framework Plan and Programme

. Impact on the ecological network The impact assessment of the FPP on the ecological network identified the negative impacts due to the temporary and permanent conversion of habitats, increased level of noise and vibrations, and an increase in the amount of pollutants in karst surface and underground waters, as well as the resulting habitat pollution. Thereby some impacts were defined as unacceptably negative and no protection measures could be prescribed to reduce these impacts to a level that is tolerable for the environment, while other impacts could be reduced to a tolerable level by complying with the prescribed measures. Since the Study is based on the fact that the presented measures and recommendations will be complied with, the impact on the ecological network is assessed as acceptable if the mitigation measures are to be implemented. Due to the recognised potentially significant negative impacts, this document prescribes the areas in which the FPP will not be implemented, as well as the measures limiting the FPP

activities ( Figure 6).

Proposed areas where the FPP should not be implemented:  areas in the continental part of the ecological network smaller than 10.000 ha – FPP activities pertaining to exploratory drilling and production  areas within 500 m around caves*  areas of the ecological network with priority habitat types and species – parts of the areas which will be defined in the Assessment of the Project Impact on the Ecological Network  habitat types and target species connected to inland waters within areas of the ecological network – parts of the areas which will be defined by the Assessment of the Project Impact on the Ecological Network * The 500 m buffer zone does not pertain only to the entrance of the habitat type (the cave's entrance), but also to the underground areas it covers. Before commencing the operations the position and direction of the cave's branches need to be determined.

Strategic Environmental Impact Study under the Framework Plan and Programme for Onshore Exploration and Production of Hydrocarbons

Figure 6 Areas of the ecological network where limitation of the FPP activities and exclusion of certain areas from the FPP are proposed

As the FPP deals with planning on a strategic level, technical solutions and locations of the wells inside the blocks are not yet known. In accordance with the legislation in force, the planning system and practice, more detailed planning/design of final solutions, selection of the best technologies and spatial arrangement of the projects is foreseen in the subsequent stages of the implementation of the FPP, at which point the Environmental Impact Assessment and the Assessment of the of the Acceptability of the Project on the Ecological Network, which will examine the impacts and prescribe the required impact mitigation measures, will be conducted. Accordingly, mitigation measures and/or recommendations that can already be identified at the strategic level are set out, and the possible impacts are assessed on the level of defined environmental objectives.

Good condition of soil, water and air

Air

Mining facilities used for fluid production, collection and forwarding systems in the production fields are transport stations, flow stations, compression stations, a technological fluid regeneration plant, industrial circuit and oil wells, gas wells, appraisal and water injector wells. Some stations and wells are equipped with gas flares. From the aspect of possible impacts on air quality, emission sources are stationary sources and flares for burning associated natural gas separated from the produced fluid and, to a lesser extent, products of diesel fuel combustion in machines and vehicles. In the exploration works stage the impact of the considered activities is of short duration and it is reflected in an increased pressure of emissions due to increased traffic and performance of the construction work. The impact ceases after the completion of these operations. In rural areas, where mining activities are performed, the atmosphere and atmosphere process capacity enables good air mixing and efficient dispersion of the occurring emissions, so that this type of impact shows no potential for increasing the ground concentrations to the limit foreseen in the Regulation on Air Pollutant Levels (OG No. 117/12). On the other hand, during the project, i.e. in

Strategic Environmental Impact Study under the Framework Plan and Programme for Onshore Exploration and Production of Hydrocarbons

the production stage, emissions occur as a continuous pressure from the part of stationary sources necessary for operating the hydrocarbon production process (gas stations, gas engines, hot water boilers, oil regenerating plants). Emissions from these sources, although insignificant in comparison with the contribution of, e.g., the transportation sector, the energetics sector etc., need to be registered and monitored so that their impact can be controlled and gradually decreased by using appropriate (possible) measures. In addition to the emissions from stationary sources, flares for burning excessive gases separated from the recovered fluid appear at the wells as occasional emission sources. These emissions also occur under controlled conditions and have a safety function. Considering that they occur occasionally and can last up to several days, based on the quantity of substances released into the atmosphere by burning they can be considered a small burden on the environment. Considering that the flares are also set up in the rural area, the atmospheric processes contribute largely to the emission dispersion and good ventilation, so this impact can also be considered small. The size of the impact will depend on the reservoir's abundance and the production dynamics of each well.

Water

Surface water and groundwater can be polluted by spills of liquid substances (fuels, motor oil) during the preparatory operations, transportation and construction work, as well as the construction of the work areas / plateaus of the wells, access roads and facilities on the production fields. In case of performing exploration works in wetland areas or on particularly karstified surface zones of carbonate sediments, the loss of drilling fluid in case of sudden floods or the loss in cavernous-fracture karst terrains can compromise the quality of surface water and groundwater.

The discharge of pollutants during transportation, exploration, stimulation work and production may affect the chemical state of surface water and groundwater. Based on the performed impact assessment and implementing the prescribed avoidance and impact mitigation measures, this impact could be assessed as negligibly negative due to mitigation measures. Technical solutions and properties of the drilling medium through cavernous and cracked karst rocks can, to a lesser extent, lead to loss of drilling mud and other pollutants, which might locally cause changes in the quality of groundwater and also locally cause changes in the flow of groundwater through fracture systems. This impact can be considered negligibly negative due to mitigation measures, i.e. the use of adequate technologies and drilling mud.

Soil

During the organisation of the work area of the well the fertile surface layer of the soil is relocated for the purposes of constructing a new well. The removed surface layer of the soil is deposited on the foreseen part of the work area of the well until the well is built and its positivity is determined (between a few months and a year). The removed surface layer is used for covering the whole surface of the work area of the well in case the well is negative and abandoned, or a part of the work area of the well in case the surface is reduced to a size necessary for setting up the surface production equipment and the rest of the infrastructure as well as for occasional setting up of the workover rig. When heavy machinery crosses the ground, especially in periods of heavier precipitation, the structural characteristics of the soil are disrupted. This is evident in the compaction of the subsurface part of the soil, which significantly disrupts the air-water relationship. Soil samples for agro-ecological analysis are collected at the location of the mud pit, one next to the location and another at a distance of about 300 m away from the location. Rehabilitation of the work area will commence after the completion of mining operations on permanent abandonment of the well, facilities or plants. Upon completion of all the rehabilitation works on the work area of the well, agro-ecological analysis of the soil and an as-is study with a proposal for the re-cultivation of the soil are conducted. The soil can be polluted during the operation of the mining facilities or transportation of hydrocarbons to the collection and transport station, in case of accidents and smaller leaks from the equipment during the hydrocarbon production.

Strategic Environmental Impact Study under the Framework Plan and Programme for Onshore Exploration and Production of Hydrocarbons

It should be noted that the significance of the negative impact on soil erosion can be evaluated only during the spatial definition of the project. Soil erosion is facilitated by removal of the vegetation from the relevant project surface. The negative impact on soil erosion is most prominent in areas with high erosion risk.

Cross-border impacts

Projects foreseen in the FPP have no significant cross-border impact when considered in connection with the exploration and production periods, since no impact on surface water and groundwater outside of the karst area is foreseen when the usual protection measures are applied. An exception is the groundwater of karst areas where operations can lead to transferring the pollution into neighbouring countries. On a strategic level this is solved by avoiding exploration and production activities in sensitive karst areas and by monitoring, as well as, for certain locations, preliminary examinations under environmental impact studies, where necessary.

Conclusion: From the aspect of climate properties and air quality, an increase in the number of pollution sources and a change in the air quality category are expected. The impact on water is acknowledged as an increase in the amount of pollutants in surface water and groundwater, while from the aspect of pedological features the impact of the increase in the amount of pollutants in the soil, as well as compaction of the soil and possible erosion due to the FPP activities are recognised.

Good condition of species and habitats

NATURAL HERITAGE

Occupying rare or endangered habitat types

Temporary and permanent conversion of spaces/habitats Setting up the access road and the work area of the well, setting up the drilling rig, developing the exploration well and construction of the collection and transport system are all sources of negative impact on habitats, primarily due to the temporary and permanent conversion of spaces.

Particularly rare and endangered habitats are already endangered due to anthropogenic activities and the implementation of the FPP would further endanger such habitats, which is why they need to be protected.

Inland surface waters and wetland habitats: The implementation of the FPP would significantly affect wetland areas (wetland complexes) which are exceptionally important for the conservation of biodiversity. This particularly pertains to Ramsar sites and wetland habitats that are part of ornithological reserves and are also very sensitive and require strict protection. The impact on these areas is considered unacceptably negative so these areas are excluded from the FPP's implementation due to their sensitivity as well as their national and international value. Freshwater habitats must be conserved because the implementation of the FPP would cause them to be sensitive. In order to preserve the good condition of these habitats it is very important to maintain sufficient amounts and quality of water, which is very important for the survival of the habitats and their important biological species. In order to prevent disrupting the good condition of these habitats, all watercourses and lakes are excluded from the FPP's implementation.

Fens: Many highly specialised and endangered plant species are connected to this habitat type, such as sphagnum moss (Sphagnum sp.), round-leaved sundew (Drosera rotundifolia) and common butterwort (Pinguicula vulgaris). Although fens are recognised as one of the most endangered habitat types in Croatia and are partly covered with various degrees of protection, they still deteriorate rapidly, mostly due to current climate conditions and ecological succession, but also due to drainage and other anthropogenic impacts. Due to fens being particularly endangered in Croatia, this habitat type is excluded from the FPP's implementation.

Strategic Environmental Impact Study under the Framework Plan and Programme for Onshore Exploration and Production of Hydrocarbons

Pollution of karst areas Underground habitats: The usage of the mass hydraulic fracturing / fracturing of wide geological structures method – “Mass frack” (this does not include hydraulic fracturing performed on the surface) – can cause physical damage to karst systems, i.e. collapsing or another form of devastation of caves because there is no complete knowledge of the karst system, i.e. the location of underground objects. In addition, the fluid used for injecting into the cracks can reach the level of groundwater in the karst and cause pollution of the karst systems. The pollution is caused by hydraulic fluid which consists of water mixed with chemicals (acids, biocides, surfactants...). The karst area is highly susceptible to all kinds of pollution due to its significant porosity and the underground circulation of water. Rehabilitation of karst damages is particularly difficult because the pollution spreads quickly through groundwaters. Based on the above and respecting the precautionary principle of the Environmental Protection Act (OG No. 80/13 and 153/13), this method is excluded in the karst area and in the rest of Croatia.

Occupying sites within the protected natural areas

Protected continental areas occupy only 12.20 % of Croatia's surface, and Croatia is obliged to protect and conserve them through international agreements and contracts.

The implementation of the FPP could cause the destruction or reduction of natural values because of which the protected area was set out and received the defined protection status. Negative impacts are the temporary or permanent conversion of spaces/habitats and emissions of pollutants into the environment. In addition, mechanic impact on the geological structure is possible while setting up the exploration and production wells.

Management of protected areas is performed based on management and spatial plans of the areas with special features, according to Article 138 of the Environmental Protection Act (OG No. 80/13). Strict protection zones of the protected areas are excluded from the FPP activities.

Temporary and permanent conversion of spaces/habitats This impact resulting from setting up the access road and the work area of the well, setting up the drilling rig, constructing the exploration and production well involves the disruption of habitat functions through their permanent or temporary conversion, endangering the status of wild taxa and possible destruction of valuable geological structures (protected geodiversity).

 National parks, strict and special reserves on the territory of Croatia:

Protected areas from the national park, strict reserve and special reserve categories are particularly valuable areas which must be protected from negative anthropogenic activity. It is estimated that implementing the FPP in these areas would significantly negatively impact their conservation, which is why all areas from these three categories are excluded from the FPP's implementation.

 Pannonian part – o Nature parks

It is estimated that exploratory drilling and hydrocarbon production would have a particularly negative impact on the stability of protected areas from the category of nature parks in the Pannonian part of Croatia, which is why the implementation of the part of the FPP which pertains to the indicated activities is limited in all nature parks of Pannonian Croatia. For other activities (preliminary explorations) under the FPP it is necessary to obtain permission/license from the relevant authority.

Nature parks Lonjsko polje and Kopački rit are exceptionally valuable wetland areas that are also declared protected areas under the Ramsar Convention. Large wetland areas are particularly important for protecting biodiversity, and

Strategic Environmental Impact Study under the Framework Plan and Programme for Onshore Exploration and Production of Hydrocarbons

they consist of various moist habitats that need to be protected from anthropogenic impact. The impact of the FPP's implementation in these areas is considered to be unacceptably negative, which is why they are excluded from the implementation of FPP activities.

o Other protected areas (regional parks, natural monuments, significant landscapes, park forests, monuments of park architecture)

No exploration drilling or production shall be conducted within the protected areas in other protection categories (regional parks, natural monuments, significant landscapes, park forests, monuments of park architecture). For other activities (preliminary explorations) under the FPP it is necessary to obtain permission/license from the relevant authority.

The Mura-Drava regional park is part of one of the most important European river ecosystems in the wetland area of the rivers Drava, Mura and Danube, which makes it a part of the largest single transboundary UNESCO river biosphere reserve in Europe, which extends through several countries: Croatia, Austria, Slovenia, Serbia and Hungary. Under the habitat impact assessment it was established that freshwater habitats are already endangered due to anthropogenic impact (land conversion, pollution), especially the habitats in the lowlands along the rivers Mura and Drava. In addition, this area has cross-border significance. In order to avoid the unacceptably negative impact which would result from the FPP's implementation, this area is excluded from the FPP.

 Karst areas

In the protected areas (nature parks, regional parks, natural monuments, significant landscapes, park forests, monuments of park architecture) in the karst area of Croatia a significant negative impact of the FPP's implementation was assessed due to the sensitivity of the karst system, which is why all protected karst areas are excluded from the FPP's implementation.

Wildlife status

Temporary and permanent conversion of spaces/habitats

Bats: Karst is recognised as a very valuable, non-renewable resource which is very sensitive to anthropogenic impact, more than many other land resources. The main reason for this higher level of sensitivity is the three- dimensional nature of karst. Due to the relationship between the caves and the waters, karst is a very complex system which remains insufficiently explored. Considering the connection of karst objects and our insufficient knowledge of all structures and the relations between different parts of the karst area, the implementation of adequate protection of a certain karst area is currently impossible on a strategic level. Bats are sensitive to shelter destruction and to disturbance while staying there (K.A. Armstrong, 2010). Bats choose karst caves with specific microclimate conditions for their hibernation period. Changes to these conditions will make the habitats less adequate for hibernation, which will lead to abandoning the habitat. Moreover, changes in surface habitat conditions may lead to alterations in the composition of flora and fauna communities and negatively affect the bats' feeding pattern, especially in autumn when they collect fat reserves which are crucial for survival (Impacts of Shale Gas Development on Bat Populations in the Northeastern United States, 2012). Considering the assessed significantly negative impact of the FPP's implementation on bats, caves and pits, which are important bat habitats, are excluded from the FPP. Locations defined as bat shelters of international importance are also excluded from the FPP.

Birds: Temporary and/or permanent conversion of wetland areas important for nesting and migration of wetland birds (ornithological reserves and Ramsar sites) will have a negative impact on this group of birds. The potentially significant negative impact of the FPP's implementation is the disturbance of breeding colonies and the temporary or permanent conversion of their habitats, which can result in the decreasing number of breeding pairs. In order for

Strategic Environmental Impact Study under the Framework Plan and Programme for Onshore Exploration and Production of Hydrocarbons

the impact to be considered negligibly negative due to mitigation measures, ornithological reserves and Ramsar sites, as well as important nationally and internationally recognised bird shelters, are excluded from the FPP. Changes within forest habitats can negatively affect the bird species inhabiting them. In case of permanent conversion of these spaces, many species can lose their shelter (e.g. cavity-nesting birds). If detailed studies of the bird populations that inhabit forest habitats are performed within those habitats and mitigation measures are defined on the level of environmental impact assessment / assessment of the acceptability on the ecological network, this impact is considered negligibly negative due to mitigation measures.

Mammals, amphibians, reptiles Changes in habitats negatively affect the species inhabiting them, due to fragmentation or permanent conversion of the habitat while setting up exploration and production plants and constructing access roads. Habitat fragmentation under the FPP will be caused by the construction of access roads. The edge effect, as the main negative impact of fragmentation, changes habitat conditions (temperature, wind, lighting, changes in vegetation composition etc.), which can cause mammals, amphibians and reptiles, who had inhabited that habitat, to avoid it. Moreover, fragmentation leads to the separation of species, i.e. the loss of genetic diversity (Impacts of Shale Gas Development on Bat Populations in the Northeastern United States, 2012).

Amphibians are the most endangered species of vertebrates, particularly sensitive during spawning season, which is why their spawning habitats need to be protected from negative impact, i.e. conversion or fragmentation. These spawning grounds are usually ponds, channels, wetlands or backwaters. These areas need to be recorded through the environmental impact assessment / assessment of the acceptability on the ecological network, and mitigation or compensation measures need to be defined. The impact on habitats important for amphibian spawning will then be considered negligibly negative due to mitigation measures.

Mammals are the second most endangered group of vertebrates (next to amphibians). The Balkan snow vole (Dinaromys bogdanovi) is a data deficient species (DD) and endemic in the Dinaric karst area. More detailed studies need to be performed in order for conservation measures and monitoring programmes to be proposed. Based on the above, on the level of environmental impact assessment / assessment of the acceptability on the ecological network of exploration and production of hydrocarbons in the karst area it is necessary to protect the habitats where this species is recorded.

The most endangered reptiles are the Balkan pond turtle, the Caspian whipsnake, Ursini's viper and the European copper skink. The Balkan pond turtle inhabits water habitats that need to be protected due to the high sensitivity of this species and its poor distribution throughout Croatia. Under the environmental impact assessment / assessment of the acceptability on the ecological network of hydrocarbon exploration and production the presence of this species needs to be recorded and mitigation or compensation measures need to be defined.

Invertebrates: Most endemic taxa of invertebrates consist of cave invertebrates and invertebrates of surface water habitats, which are protected by the Nature Protection Act (OG No. 80/13) and excluded from the implementation of the FPP. Invertebrates who inhabit freshwater habitats are sensitive to changes in habitat conditions and they indicate the water quality, which means that the threat level of a certain watercourse can be defined based on their composition. The FPP's implementation would negatively affect invertebrates, but since caves and freshwater habitats are excluded from the implementation of the FPP, the impact on invertebrates is considered negligibly negative.

Noise and vibrations (noise of seismic wave sources, noise during construction work, noise of seismic wave source impact, noise during plant operation) Birds: Noise can cause adverse effects on bird nesting, i.e. their abandonment of suitable nesting habitats. If the hydrocarbon exploration and production areas are located far enough from the nesting populations, this impact is considered negligibly negative due to mitigation measures.

Bats: In addition to their being sensitive to shelter destruction, bats are sensitive to being disturbed while staying in them (K. N. Armstrong, 2010). Noise represents a potentially negative impact on bats, especially in the periods of foraging and searching for hibernation shelters. Vibrations also represent a potentially negative impact on bats because they can disturb them during hibernation, which is essential in order for them to survive the winter period.

Strategic Environmental Impact Study under the Framework Plan and Programme for Onshore Exploration and Production of Hydrocarbons

Areas important for bats have already been excluded from the implementation of the FPP, but noise and vibrations during exploration represent additional pressure. The strategic assessment defined a buffer zone of 500 m around caves after an impact analysis of noise and vibrations on bats, so that this impact could be considered negligibly negative due to mitigation measures.

Mammals, reptiles, amphibia, birds: Short negative impacts on fauna are possible due to vibrations during 2D and 3D surveys (explosions) (The Energy & Biodiversity Initiative, 2007.). Animal migration, breeding and nesting periods are especially susceptible to this impact. This is why exploration operations need to be time-limited, considering the fauna composition of each block, which will be established in a detailed impact assessment on the environment/the ecological network before exploration commences. If this measure is implemented, the impact is considered negligibly negative due to mitigation measures.

Deaths of fauna in mud pits

Mud pits are systems in which dangerous waste, i.e. drilling mud is deposited. Because the deposited drilling material can contain certain concentrations of heavy metals and hydrocarbons, there is a risk of environmental pollution through this waste. In order to prevent this, the pits are isolated in a way that presents no threat to the environment in the form of waste material. Nonetheless, since the mud pit is an open system, there is a risk for wild species inhabiting this area. The impact can be mitigated by adequate protection measures, i.e. the access of animals to the mud pits can be prevented.

Air Pollution Emissions of harmful gases can occur during well testing due to gas flaring. The quantity and composition of harmful gases emitted during flaring and the resulting impact on air are directly related to the composition of the flared gas. However, based on the limited time of the well testing, gas flaring represents no significant impact on the environment.

Cross-border impacts: Not expected.

Conclusion: The impact assessment of the FPP on the natural heritage identified negative impacts due to the temporary and permanent conversion of habitats, noise and vibrations, deaths of fauna in open mud pits and an increase in the amount of pollutants in karst surface and underground waters, as well as the resulting habitat pollution. Thereby some impacts were defined as unacceptably negative and no protection measures could be prescribed to reduce these impacts to a level that is tolerable for the environment, while other impacts could be reduced to a tolerable level by complying with the prescribed measures.

Protection of human health and quality of life

Noise is an important environmental stressor which affects humans directly and indirectly, impacts health, causes fatigue and decreases working capacity. The increased noise level (sound intensity) at the location of the new exploration or production well will be temporarily caused by the operation of machines during the construction of new or reconstruction of existing access roads, preparing the work area of the well and operation of the drilling rig during the construction of the wellbore. During the construction of the work areas and trenching for the pipelines and electric cables bulldozers (backhoes) and trucks will be used. In the production stage the noise increase will temporarily be caused by work on the preparation and completion of the work area of the well for the purposes of connection of well exploitation, work of the machines during excavation of the trench for laying down connection pipelines (oil pipeline/gas pipeline/salt-water pipeline) and electric cables, as well as by the occasional presence of the workover rig on the well location for performing well completion and maintaining operations.

Strategic Environmental Impact Study under the Framework Plan and Programme for Onshore Exploration and Production of Hydrocarbons

The equivalent level of permanent sound of 85 dB has been adopted as a threshold for adverse impact on hearing. Occasional noise level on the workplaces of the shift supervisor, floorman, or on the working floor of the drilling derrick amounts to between 94 and 84 dB, which is within the range of adverse impact on hearing if no hearing protection is used. The continued noise level in the other work areas is between 84 and 88 dB, which indicates a possible decrease in concentration during work, which can also affect safety during work. During hydrocarbon production noise is also caused by the dosing pump (DPA), but it remains within the permitted range. The noise level on the location of the compression station ranges from 64 to 86 dB (A). All these noise sources primarily affect the employees on the project location. When considering the well as a point source of sound, i.e. noise, the expected level of noise amounts to 65 dB (A) for a radius zone of 58 m, i.e. 55 dB (A) for a radius zone of 82 m. Testing established that in the course of hydrocarbon production, during normal operation of the production well, the noise level was within the permitted range of around 50 dB (A). In a field control of the existing mining facilities (e.g. flow stations, gas stations, collection and transport stations...) with the function of hydrocarbon production, no increased noise level that could negatively influence human health was noticed. The maximum permitted amount of noise in various categories of spatial purposes are laid down in the Ordinance on Maximum Permitted Levels of Noise in an Environment in Which People Work and Live (OG No. 145/2004), so no additional mitigation measures need to be prescribed, but it is necessary to monitor the noise levels. In order to protect human health and quality of life, good soil, water and air quality need to be protected. Soil pollution can affect human health indirectly through the pollution of aquifers or through bioaccumulation through plants consumed by people or farmed animals. Water pollution can have a negative impact on human health through pollution of water for human consumption (drinking, bathing, washing water), pollution of recreational waters, irrigation water etc. Human health can also be jeopardised by consuming water organisms that live in a polluted environment. Mining activities will be performed in rural areas where the atmosphere and atmosphere process capacity enables good air mixing and efficient dispersion of the occurring emissions, so that this type of impact shows no potential for increasing the ground concentrations to the limit foreseen in the Regulation on Air Pollutant Levels (OG No. 117/12). The impact of the FPP's implementation on soil, water and air quality is described in detail under Good condition of soil, water and air. During the performance of exploration work a certain number of persons will be necessary for the optimal usage of logistics applied in the stage of 2D and 3D exploration and setting up the exploration well. A decreased need for additional workforce is expected after the exploration stage because the management and maintenance of production wells is conducted periodically in the production stage. Even though there is no evidence that previous experience with the production of oil in Croatia had caused induced earthquakes, such phenomena can still occur. There are numerous factors determining the possibility of the occurrence of such phenomena – the depth of the well, the rate of injection or extraction, volume of fluid, location and density of local faults, existing seismicity, stress fields in the upper crust, permeability of geological structures, etc. In most cases, hydrocarbon production activities will not cause seismic activity that would be felt on the surface. Nevertheless, the probability of induced earthquakes powerful enough to cause significant damage to facilities and even injury or fear to people is not to be disregarded in advance. For this reason, a mandatory monitoring of seismic activities is planned for the entire duration of production, and, if possible, before that phase, so that a baseline could be determined. The indicators to be monitored (e.g. earthquake intensity, maximum acceleration and/or speed of soil shaking, whether the cheaper accelerographs or the more expensive seismographs will be installed, whether soil deformation will be monitored...) and at what level of accuracy and completeness of information, what the thresholds for undertaking corrective measures will be and what these corrective measures will entail, etc. will be decided by national authorities in consultation with experts, taking into account all the specified risk factors, the human resources required for maintenance of the monitoring system and data analysis, as well as the funds available for such purposes. With respect to this environmental goal, possible earthquakes may impact the health of the population and cause damage to residential buildings. The impact can be short-, mid- or long-term, depending on the effects of the earthquake on a particular residential building or on the health of an individual. Moreover, the impact can be direct (e.g. injuries sustained as a direct result of the earthquake) or indirect (reduced quality of life as a consequence of the earthquake). Discharge of drilling mud or other pollutants during exploration and production can affect the quality of groundwaters because some of these pollutants may contain certain chemical elements and compounds (heavy metals, organic

Strategic Environmental Impact Study under the Framework Plan and Programme for Onshore Exploration and Production of Hydrocarbons

compounds) that could alter the chemical state of waters and adversely impact the quality of waters intended for human consumption (shallow aquifers in the northern part of Croatia and karst aquifers in the southern part of Croatia), as well as geothermal reservoirs or mineral water reservoirs. Based on the performed impact assessment and implementing the prescribed avoidance and impact mitigation measures, this impact could be reduced to negligibly negative impact due to impact mitigation measures. Cross-border impacts: Regarding waters, operations provided for in the FPP do not have a significant cross-border impact, given that with the usual measures for protection no impact is expected on surface waters and groundwaters outside the karst area, with the exception of groundwaters of karst areas, where operations can lead to transfer of pollution to neighbouring countries. On a strategic level this is solved by avoiding exploration and production activities in sensitive karst areas and by monitoring, as well as, for certain locations, preliminary examinations under environmental impact studies, where necessary. Cross-border impact of induced earthquakes is highly unlikely and is expected only on production fields in the immediate proximity to state borders and settlements or buildings near the border in the neighbouring country. Conclusion: In terms of protecting human health and the quality of life of the population, possible influences have been identified with regard to increased levels of noise, pollution of soil, water and air, as well as from induced earthquakes. The maximum levels of noise and pollutants in soil, water and air are prescribed by law. The basic premise of the Study is that the applicable laws are applied, and therefore the influence of FPP implementation on these components is considered to be negligibly negative. A short-term positive impact is expected as more people will be employed in the research stages of FPP implementation.

Providing quality conditions for economic activities

During the exploration period, as a result of the construction of access roads and drilling work areas, setting up the drilling rigs and construction of exploration wells, the landscape could be disturbed and the levels of noise could be increased on the localities. The impact of landscape disturbance is localised and, as such, will cease after the exploratory drilling rigs are removed. This impact could affect tourism negatively, in case the drilling rigs are constructed in the vicinity of tourism and catering facilities and areas designated for sports and recreation. In order to reduce the negative impact of landscape disturbance as much as possible, these rigs should be constructed outside of tourist zones and away from tourist attractions. During the production of hydrocarbons, due to different methods used in the production stage, these impacts are relatively smaller. These impacts can occur during the completion and workover of the rigs, while the rigs themselves, if they are constructed without pumps, are practically inconspicuous from the point of view of tourism. The above impacts are localised, and could, if the FPP activities are performed in tourism areas, reduce the local communities' income from tourism. The issue of exposing tourists to hydrocarbon exploration and production activities, and all the side-effects that can arise from the process (accidents) could change the tourists' perception. To reduce this risk, the FPP should avoid areas with existing and planned economic zones for tourism and catering facilities, as well as sports and recreation facilities. Regarding forestry, every operation taking place in forests or forest lands forming a part of a natural complex is certain to imply certain disturbances that may cause either positive or negative short-term or long-term consequences. FPP implementation could cause a decrease in forested surfaces by direct (permanent or temporary) occupation of forest-production areas. A change in the composition of plant species on the border of the production field can occur, as well as an increase in anthropogenic impact which can result in unwanted allochthonous species being brought in. Depending on the size of the occupied or converted area, the stability of the forest ecosystem could be disrupted and it could become more susceptible to damage, which could in turn cause the reduction of wood stocks. Land conversions can occur during the hydrocarbon exploration and production phases, resulting in the removal of existing vegetation for the purposes of constructing access roads and drilling work areas, excavation of soil on the pipeline installation route, installation of drilling rigs and construction of exploration and production wells. The conversion of smaller areas of economic forests and forest lands into production fields will be negligible from an

Strategic Environmental Impact Study under the Framework Plan and Programme for Onshore Exploration and Production of Hydrocarbons

economic perspective. However, possible conflicts with the forestry branch could occur if the production fields and blocks are planned in areas designated as special purpose forest areas and conservation forests. Therefore, the Study proposes that such areas be exempt from exploration and production, covered in more detail in chapters Measures and Conclusions and Recommendations. Besides forestry, every operation taking place on hunting grounds that are a part of a natural complex is certain to imply certain disturbances that may cause either positive or negative short-term or long-term consequences. FPP implementation may lead to habitat fragmentation and a reduction in hunting grounds' values, which may in turn lead to a reduction of suitable biotope surfaces and prevent migrations due to exploratory and production activities intended for construction of access roads and drilling work areas, setting up of drilling rigs and of exploratory and production wells. The quality of hunting areas will be reduced on the hunting grounds where planned activities will take place, due to the conversion of forested and agricultural lands and disruption of peace on the hunting grounds. Certain species of big game (wild boar and brown bear) require more forested lands, while for certain species of small game (brown hare, quail, pheasant) meadows and pastures are the most common habitat. 2D and 3D surveys can cause noises that can in turn cause wild game to escape the exploration areas. If work is conducted during the mating period, the effect on the population of game is increased. Since one of the criteria for determining the hunting ground's creditworthiness is peace on the grounds, the disruption of peace will have a short-term impact on the reduction of hunting grounds' quality. The implementation of FPP is expected to reduce the need for imported oil and gas, due to the fact that the subject of FPP implementation is the exploration and production of hydrocarbons in Croatia. The model, created according to the information procured by the Ministry of Economy and the Croatian Hydrocarbon Agency, shows both the conservative and the optimistic scenarios of FPP implementation. The conservative scenario, if the analysis is based only on one 100 M bbl production field over a 25-year production period, suggests that the annual income from production amounts to 3,8 billion HRK, the costs amount to 523 million HRK, while net profits for the state budget amount to 2 billion HRK. The optimistic scenario, if the analysis is based only on one 110 M bbl production field over a 25-year production period, suggests that the annual income from production amounts to 6 billion HRK, the costs amount to 847 million HRK, while net profits for the state budget amounts to 3.2 billion HRK. FPP activities may have an impact on the safety of the existing flood protection systems, due to possible blocking of flow profiles on certain locations. However, with the prescribed impact mitigation measures in place, these impacts could be reduced to negligibly negative. The construction works can lead to a permanent or a temporary conversion of land, as a consequence of access roads construction (permanent conversion), infrastructure construction on the work area of the well for the purposes of drilling (temporary conversion), infrastructure construction on the work area of the well for the purposes of connection of well exploitation (temporary conversion) or trench digging for the purpose of laying of pipelines or electrical grid cables (temporary conversion). The work area of the well is usually 120 x 100 m in size during the drilling phase, after which it is reduced to 30 x 70 m for the purposes of production, depending on the surface equipment of the well and the method used for hydrocarbon recovery. The activities planned during FPP implementation have a possible negative impact on the commercial branch of agriculture. The negative impact is mostly reflected in the conversion of highly valuable arable agricultural lands (P1) and valuable arable agricultural lands (P2). Their conversion, especially in the Dinarides area, where their percentage is extremely small (0,9 % of P1 lands), is expected to cause a need for larger investments in agricultural production in order to retain the same margin of profit, that is, it could lead to a smaller margin of profit if the investment remains at the same level. Even though the work areas of the wells, the collection and transport stations are intended for temporary conversion, the exemption of P1 and P2 agricultural lands in the Dinarides area is recommended for the purposes of exploration or production of hydrocarbons, due to the low share of agricultural surfaces in the total surface of the Dinarides. In the Pannonian basin area this conversion is considered to be negligibly negative, provided that mitigation measures are applied, given that the total share of P1 and P2 lands is significantly higher there then in the Dinarides. Since access roads are constructed in straight lines, fragmentation of surfaces is expected, which puts additional pressure on the already small agricultural surfaces. Apart from a negative impact of land conversion, a conflict with the way in which agricultural lands are used has also been identified, especially on the pipeline routes (gas pipelines and oil pipelines). The limitation is reflected in

Strategic Environmental Impact Study under the Framework Plan and Programme for Onshore Exploration and Production of Hydrocarbons

the inability to use the land in the pipeline routes for growing cultures with roots that extend deeper than 1 m, which means that these routes should be exempt from growing fruit and vineyard crops. A conflict of engaging in eco- friendly agriculture within 200 m of the project area due to the emissions of pollutants in the soil, whose maximum saturation has been defined by the Ordinance on Agricultural Land Protection has also been identified (OG No. 9/2014). Cross-border impacts: There is a possibility of a negative impact of FPP implementation in the form of a change in tourists' perception due to the production of fossil fuels. Conclusion: The analysis of the impact of economic activities components has determined the existence of negative impacts: the increase of noise levels in tourism areas, landscape disturbance and the disruption of tourists' perception, loss of forest lands, the reduction of wood stocks, disruption of the forest ecosystem stability, fragmentation of forests and forest habitats and hunting grounds, disruption of peace on hunting grounds, deterioration of hydromorphological status of the surface water bodies due to the occupation of space in foreshores, the impact on economic climate, conversion of P1 and P2 lands and limitation of agricultural production due to the laying of pipelines. A positive impact has also been identified in the reduction of the current negative trend in oil and gas production in Croatia. Some impacts, for which appropriate protection measures that could mitigate the impacts to an environmentally acceptable level cannot be prescribed, have been defined as unacceptably negative, while other impacts could be brought down to an acceptable level by implementing the prescribed measures.

Providing efficient and sustainable infrastructural systems and services

The activities planned in the FPP have a positive impact on the gas pipeline and oil pipeline grids, as well as road infrastructure. During exploratory operations, due to the possible poor connection of blocks to public roads, construction of new roads will be necessary. These will be necessary to transport the infrastructure required for hydrocarbon exploration and to transport people and goods. Given that the newly built roads are permanent, it is estimated that they will be used more often over time (local population will use it during and after production). The newly built roads will contribute to the overall length of roads in Croatia. Hydrocarbons must be transported after production. One of the methods for hydrocarbons transportation is via pipelines (gas pipelines and oil pipelines). In case the existing gas and oil pipeline network is deemed insufficient, additional pipes will be laid. The expansion of gas and oil pipeline network will have a positive impact on the infrastructure by contributing to its overall length on a national level. The impact of network expansion has an immediate permanent effect on the existing network of gas and oil pipelines in Croatia. The impact of induced seismicity is described in the environmental objective “Protecting Human Health and the Quality of Life”.

Cross-border impacts Cross-border impacts in terms of building a new or expanding the existing infrastructure network are not expected. Cross-border impact of induced earthquakes is highly unlikely and is expected only on production fields in the immediate proximity to the state borders and settlements or buildings near the border in the neighbouring country. Conclusion: In view of the above stated, it is expected that the FPP implementation will have a conditionally positive impact on the “Providing Efficient and Sustainable Infrastructural Systems and Services” environmental goal, given that the impacts of building new or expanding existing infrastructural systems and services were assessed as positive. However, should the measures and the mandatory seismic monitoring system prescribed by the Study not be implemented, a conflict could occur due to potential damage to infrastructure caused by induced earthquakes. This issue should be resolved during the lower levels of planning, design and FPP activities implementation.

Strategic Environmental Impact Study under the Framework Plan and Programme for Onshore Exploration and Production of Hydrocarbons

Protection, preservation and sustainable use of the landscape and cultural heritage

Regarding cultural heritage, the biggest impact of the FPP has been identified with respect to archaeological heritage. The impact can be positive if new archaeological sites are uncovered, documented and presented during a prior archaeological survey. The impact can be negligibly negative if the impact mitigation measures cause the spatial and visual integrity of certain historical buildings or units (both urban and rural) to change. It can be negative if the authenticity of a cultural heritage or historical environment is disturbed or if an archaeological site is damaged.

With respect to landscapes, impact assessment is based on the following: the authenticity is greater the bigger the distance from anthropogenic impact, the bigger the biodiversity is, the more natural the cover is, the greater the protection category and the more inaccessible the terrain is. If the FPP is planned on particularly valuable natural areas or areas with a significant share of tradition elements, its implementation threatens the authenticity of such areas. If the FPP is planned in close proximity to an area of a high national or international protection category, its implementation threatens their protection and preservation. If the FPP is planned in areas with tall vegetation, its removal would significantly alter the type of habitat, cause it to fragment and change the visual quality. If the FPP is planned on steeper, more inaccessible or unstable terrains, a larger number of changes is necessary in order for it to be implemented, thus making the terrain less stable. If the FPP is planned on high-profile positions of recognizable visual features, which creates a strong media presence in a wider area, the perception of landscape is degraded and its identity significantly and permanently altered. Seismic screening and testing and setting up of exploratory rigs during exploratory stage, or production plants and supporting facilities during production stage, require the use of construction vehicles and equipment, whose uninterrupted operation and the setting up of the plant itself require a clear terrain. Therefore, if vegetation cover is present, it is necessary to remove it. The impact is equally manifested in the changes of morphological features due to the change in structure or texture as a result of vehicle operations and construction of exploratory and production wells. The implementation of project compromises the naturality of the area and alters the presence and type of vegetation cover and habitats. Furthermore, depending on the proximity of the site, the visual appeal of the area where water bodies and/or elements of natural and cultural heritage are present is also compromised. All of the above facts impact the visual perception of the landscape and its value. In case there is no commercial discovery of hydrocarbons, the area will be rehabilitated, which reduces the negative impact on landscape to a temporary one. The rehabilitation of the site has a positive impact on the landscape because the rehabilitation is expected to return the area to its original state, if there is no irreparable damage to natural elements.

Cross-border impacts With respect to cultural and historical heritage, no cross-border impacts are expected.

Conclusion With respect to cultural and historical heritage, possible impacts to archaeological and building heritage have been identified due to changes in spatial and visual integrity, the disruption of authenticity of cultural heritage and historical environments and damages to archaeological sites. As a result of the potential discovery of new archaeological sites, positive impacts of FPP implementation could also occur. With respect to landscape, the disruption of naturality and authenticity of an area could occur, as well as changes in character and visual perception of an area by influencing vegetation and bodies of water, disruption of natural and anthropogenic values, creation of erodible areas and disruption of visual qualities and identity of an area.

Appropriate impact mitigation measures have been prescribed for all environmental goals. Therefore, a negligibly (moderately) negative impact is expected from the FPP implementation, due to impact mitigation measures.

Strategic Environmental Impact Study under the Framework Plan and Programme for Onshore Exploration and Production of Hydrocarbons

Minimised risk of accidents

Natural heritage

Accidents include spilling of hydraulic fluids, mud, formation water or oil, as well as gas leaks. This could lead to pollution and affect habitats and species. The consequences could be most severe in krast areas, where pollution is spread very rapidly, polluting groundwaters, caves and threatening the sensitive cave fauna. Formation water spill: Formation water contains residues of polycyclic aromatic hydrocarbons, volatile organic substances, heavy metals and radioactive substances. Some metals and radioactive substances accumulated in plants are a threat to the health of herbivores. Direct exposure to formation waters leads to acute toxicity. Mud spill: Barite found in drilling mud contains certain levels of heavy metals (mercury, cadmium) that have the capacity for bioaccumulation. Also, drilling mud contains a high quantity of hydrocarbons causing acute toxicity and leading to sublethal effects after a longer exposure of organisms to lower concentrations. Hydraulic fluid spill: The discharge of insufficiently purified or spillage of unpurified hydraulic fluid may cause the pollution of surface and groundwaters and the surrounding soil, which also poses a threat to species and habitats, especially in the Dinarides (extremely sensitive cave habitats and cave fauna). Oil spill: Direct exposure to highly toxic polycyclic aromatic hydrocarbons has lethal effects on wild species. Due to its persistence in the environment, sublethal effects of long-term exposure of wild species to hydrocarbon residue in the environment can present themselves after a few generations. Release of hydrogen sulfide from wells: Concentrations as low as 1 ppm can have a negative impact on migratory bird species and other migratory species. Hydrogen sulfide has recently been identified as vasoactive (it can cause a change in the diameter of blood vessels) in mammals, birds, reptiles and fish (J.D. Lusk and E.A. Kraf, 2010). Waste

In case of an accident, pollution of the work area of the well occurs, due to the spillage of fuel, work fluids, waste similar to utility waste, waste waters, etc. The mud pit is then filled with emergency kill drilling mud, raw oil used for the release of jammed tools, cement slurry remaining after failed cementation, oil and formation fluids resulting from uncontrolled eruption of fluids from the well.

Pedological features

The increase in hydrocarbons concentrations in the soil alters the microbiological composition of the soil, reduces the overall microbiological activity, especially that of the bacteria, and reduces the number of aerobic bacteria while at the same time rapidly decreasing the number of anaerobic bacteria in the soil. Raw oil has a larger impact on the overall number of amonifiers in the soil, whereas the oil-based solidified material has no impact on the overall number of amonifiers. Raw oil and solidified materials affect the overall number of nitrifiers in the soil. The overall number of denitrifiers was more affected by the solidified material than raw oil. A consequence of an increased concentration of hydrocarbons in soil is a decrease in the reduction potential of soil and a gradual reduction of certain compounds – mostly iron, manganese, sulphur, etc. Since hydrocarbons are rich in carbon, the ratio of carbon to nitrogen in the soil shifts in favour of carbon. This has a negative impact on the above-mentioned microbiological activity in the soil, causing a disturbance in the plants' feeding on nitrogen (Kisić I., 2012). Research shows that the ratio of humidity in polluted soils was smaller than in the control group. However, in the samples of rehabilitated soil the ratio of humidity was approximately the same as in the control group samples. The same research studied the impact of hydrocarbons on root elongation, soil permeability and pH-values in soil. The physical properties of polluted soil were significantly worse (by 46 – 67%), compared to the control group. However, soil rehabilitation improved the same properties to 85 – 95%, compared to the control group. Root elongation and water deficiency in leaves were reduced by 90 % in polluted soil. The substances that affect soil fertility (nitrogen,

Strategic Environmental Impact Study under the Framework Plan and Programme for Onshore Exploration and Production of Hydrocarbons

overall carbon, available phosphorous and pH-value) increased by 33 – 103%, due to bacteria degradation in anaerobic environment of pores clogged by oil (Essien & John, 2010). The Environmental Protection Agency's (AZO) records for 2005 show 24 sites polluted by oil spills. 21 out of 24 sites polluted by oil spills have been rehabilitated. Climate features and quality of air

Accidents could have a big impact in the short term, but no long-term consequences for the environment and nearby population (elevated concentrations of chemical compounds and particles due to fluid burning). Due to the relative isolation of wells and their distance from settlements, even in accidents the impacts do not have the potential to cause large scale damage to people's health and environment. In case of an accident (blowout, gas pipeline cracks, rig or equipment failures), natural gases could be released into atmosphere. Impact on waters

If exploration, rehabilitation of the block, transport of equipment and materials, waste material management, cleaning and maintenance of production wells or cleaning transportation pipelines at cleaning stations are handled improperly, certain amounts of oil derivatives (oils, greases, fuel), formation water or drilling fluid or dangerous substances may be released into surface waters or groundwaters, especially in karst terrains. Pollution of groundwaters may also occur during exploratory operations, due to dangerous construction of wells (e.g. absence of “Preventers” in certain stages of drilling) and unforeseen changes in drilling conditions, which can result in a loss of drilling mud in the drilled aquiferous layers. Groundwater pollution may occur due to uncontrolled and insufficiently prepared stimulation work, which can cause a loss of pollutants used in such works. Landscape features

Accidents may have a potentially negative impact on natural and anthropogenic elements (surface cover, bodies of water, natural and cultural heritage items) that are at the same time landscape elements. This may indirectly or directly influence the overall landscape of an area and have extensive consequences due to its degradation. Cultural and historical heritage

The primary type of accident capable of causing damage or destruction to a cultural item or an archaeological site are explosions, which can be caused by a natural, technically-technological or anthropogenic phenomenon. Possible accidents will be covered by the risk management plan, which will reduce their impact to the smallest possible level. Explosions that could cause damage or destruction to buildings or archaeological heritage in its proximity may occur during exploration well drilling or their testing and during any stage of hydrocarbon production, from drilling, transportation and treatment to storage.

Tourism

Accidents that can impact tourism are all kinds of uncontrolled oil spills, regardless of whether they occur during the exploratory stage, production stage or during transport of raw materials. These are followed by a group of accidents impacting the quality of drinking water in tourist zones and/or sports and recreation zones, i.e. causing temporary or permanent restrictions of its use (e.g. releasing drilling mud into aquifers). Another group of accidents impacting tourism is a group of accidents requiring the evacuation of tourists. These can be induced seismicity and hydrogen sulphide or gas spills. All these accidents have a more significant impact on tourism the closer they are to tourist or sports and recreation zones. By far the most significant consequence of these accidents on tourism is their media exposure, i.e. the possible impact on the change in the tourists' perception. Similarly, the accidents that occur during FPP implementation could have a negative impact on Croatia being perceived as a tourist destination with untouched nature and cause a drop in income from tourism.

Strategic Environmental Impact Study under the Framework Plan and Programme for Onshore Exploration and Production of Hydrocarbons

Forests and forestry

In case of accidents, pollution of forest lands is possible by drilling mud spills, blowouts with oil spills, rig explosions or release of hydrogen sulphide from the wells. The aforementioned accidents could cause damage to forest species, leading to a decrease in vitality or disruption of the forest ecosystem stability, which could in turn have negative impacts on wood industry or forest management. Agriculture

Accidents that can impact agriculture are all kinds of uncontrolled spills of oil derivatives during the FPP implementation. The surfaces where accidents occur will not be appropriate for agricultural production until the area is rehabilitated using appropriate soil remediation technologies (biological, chemical, physical and thermal). Game and hunting

In case of accidents, the quality of hunting areas will be reduced, which will cause game to lose a part of their suitable habitat. During the exploration and production stages, accidents can occur, leading to surface water pollution, which could indirectly lead to endangering the game population drinking that water. Fisheries

Accidents can have a negative impact on fisheries because water bodies exposed to accidents will not be appropriate for fishing activities and aquaculture until the area is rehabilitated using appropriate technologies that will return the polluted areas into their original state. Socioeconomic characteristics

In case of accidents such as drilling mud or formation water spillage, gas leaks, rig explosions or blowouts with oil spills, the production of hydrocarbons will be suspended, leading to a decrease in income from the energy sector. Accidents also lead to deterioration of the local population's quality of life due to the negative impact of accidents on the health of local population and environment/nature. Public perception on accident safety during hydrocarbons exploration and production stages is negative, due to insufficient knowledge of safety measures in place and accidents that had occurred and had significant media coverage.

Infrastructure

Accidents can cause a reduction in infrastructure quality by damaging the facilities and prevent their functioning permanently. Rig explosions could cause permanent damage to certain infrastructure components (i.e. power lines). Earthquakes occurring as a consequence of induced seismicity could, depending on their force, cause damage to roads, railways or pipelines. Transportation of hydrocarbons by trucks via roads that were not intended for such loads may lead to road damage.

Human Health and Quality of Life

Most accidents that can occur as a consequence of FPP implementation may have a negative impact on human health. Depending on the severity of impact of the accident, human health may be affected by induced seismicity, traffic accidents or accidents occurring in the exploration or production stages. Negative impacts may be direct or indirect, caused by water, soil and air pollution. The area could be exposed to increased noise, well above values regulated by law, due to faulty equipment.

Strategic Environmental Impact Study under the Framework Plan and Programme for Onshore Exploration and Production of Hydrocarbons

6. Environmental protection measures

The FPP mitigation and improvement measures which could have been defined on a strategic level are indicated in the table below. An evaluation of the need for an environmental impact assessment and/or an environmental impact assessment procedure regarding the project, including the assessment of the acceptability of the project on the ecological network, will be carried out with regard to certain FPP activities.

Measures mitigating Environmenta the negative impacts Indicator Justification of the measure Time frame l component of the Programme and Programme* improvement measures Identify rare and endangered habitats in the Prior to project area and define the appropriate mitigation Protection of rare and endangered implementing measures during the acceptability assessment of habitats on project sites within the FPP the FPP the project on the ecological network and prior to implementation. activities Occupying rare or implementing the FPP activities. endangered habitat types During the Protection of rare and endangered The massive hydraulic fracturing method should FPP habitats which are highly sensitive to not be used. implementatio pollution as well as physical damage. n.

Part of the FPP activities related to exploratory drilling and production of hydrocarbons is not to be carried out in protected areas of the Republic of Croatia's Pannonian region belonging to the following categories: nature park, regional park, nature monument, significant landscape, forest park and a monument of park architecture. Other activities (preliminary Prior to Occupying sites within exploration) require permission/licence from the Protection of natural features within the implementing the protected natural relevant authority. protected areas the FPP areas activities All national parks, strict reserves and special NATURAL reserves, as well as Nature Park Lonjsko polje, HERITAGE Nature Park Kopački rit, Regional Park Mura- Drava and Ramsar sites are also excluded from the FPP implementation.

The implementation of FPP activities is not permitted in protected karst areas.

Bats: A protective (buffer) zone of 500 m around the speleological sites shall be defined regarding the Although the sites important for bats speleological sites which serve as shelters for bats have been excluded from the FPP, it is and where no FPP activities implementation is necessary to provide additional Prior to permitted. protection from the noise and vibrations implementing The 500 m buffer zone does not pertain only to the and a measure of shifting the project the FPP entrance of the habitat type (the cave's entrance), 500 m from the speleological sites activities but also to the underground areas it covers. Before important for bats shall therefore be commencing the operations the position and Wildlife status introduced. direction of the cave's branches need to be determined. Birds: It is necessary to carry out an assessment of Prior to the acceptability of the project on the ecological Protection of birds by identifying the implementing network and/or environmental impact assessment habitats used by birds the FPP prior to implementing the FPP activities. activities In order to protect the wild taxa from the Other flora and fauna: It is necessary to carry out Prior to negative impact of habitat conversion the environmental impact assessment / implementing and fragmentation as well as noise, it is

Strategic Environmental Impact Study under the Framework Plan and Programme for Onshore Exploration and Production of Hydrocarbons

Measures mitigating Environmenta the negative impacts Indicator Justification of the measure Time frame l component of the Programme and Programme* improvement measures assessment of the acceptability on the ecological necessary to define the mitigation the FPP network prior to implementing the FPP activities. measures regarding the fauna in the activities area of execution of works. During the These measures need to be introduced It is necessary to set up protective elements activities in order to prevent animal deaths in (fences) during the mud pits installation in order to planned open mud pits and reduce the stated prevent the fauna from accessing the mud pits. under the impact. FPP Priority habitat types and species are in danger of extinction and the EU is It is necessary to identify the distribution of the particularly responsible for their priority habitat types and species in the Natura preservation considering the extent of 2000 area and the corresponding mitigation their natural areas, meaning that measures during the assessment of the national species populations, i.e. acceptability of the project on the ecological national habitat type surface areas are network and prior to implementing the FPP highly present in the Natura 2000 activities. network. This measure is introduced with the aim of protecting the priority

habitat types and species on potential project sites within the FPP implementation. Since the Nature Protection Act (Official Gazette 80/13) prohibits the destruction, It is necessary to define the sites of the habitat damage and removal of icicles, living type 8310 Caves not open for the public* within speleological site species, fossil, certain Natura 2000 areas during the assessment archaeological and other findings, the of the acceptability of the project on the ecological disposal of waste or discharge of waste network and prior to implementing the FPP substances into speleological sites as activities. In case of coming across this habitat well as other projects and activities type, it should be excluded from the FPP which change the habitat conditions implementation, with a buffer zone of 500 m within the site, a proposal has been put around the habitat type site*. forward not to carry out the activities Status of the planned under the FPP in close vicinity conservation objectives of speleological sites. Prior to ECOLOGICAL and integrity of the As far as Natura 2000 areas which cover the implementing NETWORK NATURA 2000 habitat types and species depending on water the FPP ecological network area (habitat type group "Freshwater habitats") are activities concerned, the activities planned under the FPP Habitats and species depending on are limited in close vicinity of watercourses inland water are highly sensitive to (activities will not be carried out within 250 m from effects resulting from anthropogenic the habitat type in the Croatian Pannonian region activities. An acceptability assessment and 1 000 m from the habitat type in karst), i.e. in for the ecological network must be areas of habitat types and species which depend carried out for each site prior to the on inland waters. exploration and production of hydrocarbons. The composition and distribution of flora and fauna must be defined regarding each project planned As far as the Natura 2000 areas specific for within the Natura 2000 area depending waterbirds and birds nesting in areas depending on inland water, or in vicinity of such an on inland waters are concerned, it is necessary to area, and such identification should be define the distribution of nesting bird populations used to determine the measures and the adequate distance from this target mitigating negative impacts of habitat species group during the assessment of the fragmentation and conversion as a acceptability of the project on the ecological result of creating the access road and network, with regards to the source of noise the work area of the well. during the execution of works and the drilling rig operation.

Sites which are potential bat shelters require mandatory acceptability assessment of the

project on the ecological network on the site concerned and determining the protection

Strategic Environmental Impact Study under the Framework Plan and Programme for Onshore Exploration and Production of Hydrocarbons

Measures mitigating Environmenta the negative impacts Indicator Justification of the measure Time frame l component of the Programme and Programme* improvement measures measures, i.e. the adequate distance between the project (buffer zone) and such habitats.

The FPP implementation is limited with regards to the Natura 2000 areas smaller than 10 000 ha in the sense that exploratory drilling and hydrocarbon production are not conducted within these areas.

The 500 m buffer zone does not pertain only to the entrance of the habitat type (the cave's entrance), but also to the underground areas it covers. Before commencing the operations the position and direction of the cave's branches need to be determined.

* State Institute for Nature Protection holds the GPS coordinates of caves and pits in the Republic of Croatia.

Any waste incineration is forbidden during the construction works and drilling.

The emission sources must be built, equipped, used and maintained so that they do not emit pollutants exceeding the emission limit values It is necessary to avoid any additional During the (NOx, SO2, CO) into the air, i.e. so that they do excessive emission of pollutants into the CLIMATE activities Air quality indicators not emit pollutants/allow the pollutants to enter air and to provide the data necessary for FEATURES AND planned and their extremes the air in quantities which might endanger human quantitative determination of emissions QUALITY OF AIR under the health, quality of life and the environment. from all sources during the FPP FPP implementation It is necessary to keep constant records of emissions into the air and monitor the quantity of compounds emitted into the air at all stationary emission sources, on wells and flares for excessive hydrocarbons flaring.

During the Heavy machinery should not be used on wet soil. activities Degraded soil surface Further soil degradation needs to be planned areas prevented. Machinery least disruptive for the soil should be under the used. FPP During the PEDOLOGICAL planning FEATURES If the project is planned in an area of moderate and stage and the implementatio Soil erosion high risk of erosion, it is necessary to use Soil erosion prevention. agrotechnical mitigation measures pursuant to the n of activities Ordinance on Agrotechnical Measures. planned under the FPP

Total number of Move the projects outside the limits of the existing During the overnight stays and/or planned economic zones used for catering Reduction of indirect and direct effects TOURISM planning and tourism as well as sports and recreational on tourism Average daily stage expenses per person purposes.

During the Plan the infrastructure installation in the Pannonian planning Basin in such a way that, except in special stage and the circumstances, occupying P1 and P2 land P1 and P2 land Protection of a highly valuable (P1) and implementatio categories is avoided by all means. surface area valuable (P2) agricultural land. n of activities

AGRICULTURE planned FPP activities in the karst area should be carried out under the outside the P1 and P2 land category. FPP FPP activities should be planned in such a way that Additional infrastructure projects on During the Surface areas used for the existing infrastructure is used to the maximum agricultural surface areas should be planning agricultural production extent. avoided. stage Plan the projects planned under the FPP which Reducing/avoiding the disruption of the During the FORESTS AND Forest land conversion are located in forests and on forest land in a way welfare functions of forests and the planning FORESTRY that the stability of the forest ecosystem is not stability of the forest ecosystem. stage and the

Strategic Environmental Impact Study under the Framework Plan and Programme for Onshore Exploration and Production of Hydrocarbons

Measures mitigating Environmenta the negative impacts Indicator Justification of the measure Time frame l component of the Programme and Programme* improvement measures disrupted, that the smallest possible surface area implementatio is covered and that there is no increased erosion n of activities of the forest land as well as the reduction of the planned hydrological and water protective role of forests. under the FPP Regarding commercial forests, a proposal has been made to prescribe protection measures and monitoring in an environmental impact assessment, since these forests, in addition to the forest products production, are also used for the preservation and improvement of welfare functions and they affect the integrity of the forest ecosystem both directly and indirectly.

The FPP activities cannot be carried out in areas of conservation forests and special purpose forests in order not to disrupt their functions.

The FPP activities should be planned in a way that the existing infrastructure is used to the maximum extent in order to avoid the disconnection of forests, i.e. habitat fragmentation.

It is necessary to execute the preparatory works and the drilling rig installation during the vegetation standstill period, in order to avoid damage to the forest soil.

Hunting areas should be occupied as little as possible with the FPP activities so that the rating grade is not reduced. During the planning It is necessary to consult the persons allowed to stage and the hunt in certain hunting grounds where the FPP GAME AND Quality of the hunting The potential hunting ground stability implementatio activities will take place and agree on the time the HUNTING areas disruption should be reduced. n of activities activities planned under the FPP, which might planned disrupt the peace and quiet during the under the breeding/nesting period of game in areas FPP important for the reproduction of certain species, will be carried out.

It is necessary to determine and define the indicative parameters of induced seismicity (for example, induced earthquake magnitudes, earthquake intensity, acceleration and/or speed During the Experience shows that the of soil shaking as a result of induced activities Number of earthquakes suspension or reduction of production SEISMIC earthquakes) as well as their border values. planned in close vicinity of the lead to induced earthquake FEATURES under the wells termination. Reduce and/or stop production in the event the FPP. selected indicative parameters exceed the set thresholds.

Natural and It is necessary to use the existing roads and avoid Ensure the preservation of significant During the anthropogenic the development of new ones as much as and specific features of the landscape, planning, elements relationship possible during project realisation. including those important for the LANDSCAPE design and preservation of biological, geological FEATURES The existing vegetation should be preserved to implementatio Presence and type of and cultural values which determine the maximum extent, especially the indigenous n of the FPP vegetation its value and aesthetic image and species of trees and bushes. activities. prevent the changes affecting them,

Strategic Environmental Impact Study under the Framework Plan and Programme for Onshore Exploration and Production of Hydrocarbons

Measures mitigating Environmenta the negative impacts Indicator Justification of the measure Time frame l component of the Programme and Programme* improvement measures Presence and type of Project realisation should be avoided near areas taking the above mentioned into water surfaces of significant natural, traditional and cultural and consideration during the area's historical features. planning and design stage as well as Presence and level of during the planning and use of the natural and cultural natural resources. heritage protection The positioning of the project should be adjusted Terrain inclination to the area's relief features in order to reduce the changes to a minimum. Visual exposure of the project given the type of project Presence (number) and vicinity of construction heritage Within the environmental impact assessment the (of individual buildings spatial, physical and visual integrity of historical The negative impact on the spatial and and cultural and buildings, urban and rural units should be visual integrity of construction heritage During the historical units) listed in analysed and the impact mitigation measures should be mitigated. planning the Register of Cultural should be prescribed. A study of landscape stage Objects of the Republic sensitivity (landscaping basis for a spatial unit) is of Croatia and preferable. recorded in the spatial CULTURAL AND planning HISTORICAL documentation HERITAGE Presence (number) and vicinity of the archaeological heritage It is necessary to carry out a preliminary sites listed in the archaeological reconnaissance of the area of Damage/destruction of the existing During the Register of Cultural planned survey projects and positions of the and potential archaeological sites planning Objects of the Republic exploratory and production wells and future rigs should be avoided. stage of Croatia and and pipelines. recorded in the spatial planning documentation Protecting the population from harmful Exploratory drilling, as well as production drilling effects of noise and other negative Level of noise in an rings – working areas, are not permitted within impacts of the FPP, pursuant to the During the environment in which construction areas defined in certain town, i.e. Ordinance on the Maximum Permitted planning people work and live municipality spatial plans, unless otherwise Noise Level in an Environment in stage defined in those spatial plans. Which People Work and Live (Official Gazette 145/04).

Sanitary protection zones I – IV are exempt from the implementation of the part of the FPP which refers to the execution of exploratory and production wells in zones of sanitary HUMAN HEALTH protection of sources with the AND QUALITY OF abstraction of water from aquifers with LIFE Activities carried out under the FPP should not be fracture and fracture-cavernous carried out within the water source sanitary porosity, while that exemption in the Quantity and pollution protection zones, unless the results of zones of sanitary protection of sources During the of groundwater in the microzonation show that the project or activity will with the abstraction of water from planning water source sanitary not harm the groundwater. In that case certain aquifers with intergranular porosity stage protection zones projects and activities can be permitted in refer to zones I – III. Certain projects sanitary protection zones II, III and IV and activities can be permitted in sanitary protection zones II, III and IV, if the results of microzonation show that the project or activity will not harm the groundwater. Microzonation covers detailed water research used to test the impact of the project on the aquifer (Ordinance on the Conditions

Strategic Environmental Impact Study under the Framework Plan and Programme for Onshore Exploration and Production of Hydrocarbons

Measures mitigating Environmenta the negative impacts Indicator Justification of the measure Time frame l component of the Programme and Programme* improvement measures for Determining Zones of Sanitary Protection of Sources, 66/11 and 47/13). In the event of indisputable public interest, the same Ordinance provides for the implementation of the project despite the exemption, provided that its necessity and possibility to protect the water bodies with additional measures is proven.

It is necessary to carry out exploration and production of hydrocarbons in inundations of During the Hydromorphological rivers with special protection measures regarding Special conditions for works in activities status of the surface the area of works and by controlling the project inundations prevent the impact on planned water bodies impact on the flooding defence system, flooding defence systems. under the especially in places in which the watercourse's FPP flow profile narrows to a significant degree.

Only water-based drilling mud should be used. By using water-based drilling mud and Quantity and type of During the The gaseous drilling mud should be used while gaseous drilling mud which are less pollutants in the activities drilling in an area which has cavernous and toxic in comparison to other types of surface water and planned cracked rocks. A special authorisation issued by drilling mud the risk of water pollution groundwater – under the the competent authorities must be obtained for in the wider area of the works is FPP SURFACE WATER the use of other types of drilling mud. reduced. GROUNDWATER AND SURFACE By using water-based drilling mud and WATER Only water-based drilling mud should be used. The gaseous drilling mud which are less gaseous drilling mud should be used while drilling in toxic in comparison to other types of an area which has cavernous and cracked rocks. It drilling mud the risk of water pollution is necessary to monitor the drilling mod losses and in the wider area of the works is reduced. Stricter conditions regarding Quantity and type of plan interventions in case of losses > 1 m3/h in case During the the monitoring of drilling mud losses pollutants in the of drilling in karst areas and areas of increased risk activities reduce the risks of groundwater surface water and due to groundwater pollution. planned pollution groundwater – under the FPP GROUNDWATER Research, regulate and individually approve the stimulation works through an impact assessment A special procedure regarding the procedure and by obtaining the location permit. stimulation works disables the use of technology endangering the quality of The hydraulic fracturing method (massive groundwater. hydraulic fracturing) should not be used!

*The concessionaire shall be held responsible for the implementation of the financial and organisation part of stated measures.

7. Environmental monitoring

Environmental monitoring will be carried out through the monitoring indicators related to the successful implementation of the Programme and projects planned within the Programme, as well as through the indicators defined in the table below. The investor will be held responsible for environmental monitoring during all onshore hydrocarbon exploration and production activities, in terms of his obligation to organise and finance expert monitoring in the way shown in the table.

Environmental component Indicator Indicator monitoring tool

Strategic Environmental Impact Study under the Framework Plan and Programme for Onshore Exploration and Production of Hydrocarbons

Occupying rare or Monitoring in a way defined in the environmental endangered habitat types impact assessment/the assessment of the NATURAL HERITAGE Occupying sites within the acceptability on the ecological network for each protected natural areas project. Wildlife status ECOLOGICAL NETWORK Status of the conservation Monitoring in a way defined in the assessment of objectives and integrity of the the acceptability on the ecological network for ecological network area each project. Quantity and type of pollutants in the surface water and groundwater – surface Monitoring the groundwater status, including the water baseline, in accordance with the Hrvatske vode GROUNDWATER AND Quantity and type of company programme and additional requests SURFACE WATER pollutants in the surface water which will arise from the location permit and groundwater – obtainment procedures groundwater Hydromorphological status of the surface water bodies Constant recording, analysis and locating the Number of earthquakes in SEISMIC FEATURES local earthquakes via the local (existing and close vicinity of the wells newly-installed) seismic stations network. Monitoring pursuant to the Ordinance on the Methodology for Agricultural Land Monitoring Degraded soil surface areas and, optionally, pursuant to the Manual on PEDOLOGICAL Permanent Croatian Soil Monitoring FEATURES Quantity of pollutants in the PAH and heavy metal concentrations soil Records on the agricultural land conversion, Soil erosion county spatial plans

CLIMATE FEATURES Concentrations of pollutants for air quality Air pollutant emissions AND QUALITY OF AIR monitoring

Cultural heritage (individual buildings, cultural and historical units and It should be recorded whether the cultural archaeological heritage) CULTURAL AND heritage and its surrounding area have been listed in the Register of HISTORICAL degraded as a result of failing to abide by the Cultural Objects of the HERITAGE prescribed impact mitigation measures Republic of Croatia and recorded in the spatial planning documentation

FORESTS AND Monitoring the Hrvatske šume d.o.o. base Forest land conversion FORESTRY reports

P1 and P2 land surface AGRICULTURE area

Strategic Environmental Impact Study under the Framework Plan and Programme for Onshore Exploration and Production of Hydrocarbons

Records on the agricultural land conversion, Surface areas used for county spatial plans agricultural production

Records of implementing the game and hunting GAME AND HUNTING Quality of the hunting areas area management act and records of monitoring the game protection programme

Level of noise in an Level of noise during the exploration and HUMAN HEALTH AND environment in which production of hydrocarbons, especially in places QUALITY OF LIFE people work and live where the areas concerned are located near settlements. Quantity and pollution of Groundwater pollution during the exploration and groundwater in the water production of hydrocarbons. source sanitary protection zones

8. Conclusions and recommendations

The Strategic Study of the Environmental Impact of the Framework Plan and Programme for Onshore Exploration and Production of Hydrocarbons has identified potentially significant impacts of the FPP implementation on certain environmental components as well as the legal limitations regarding the use of space. Pursuant to the Islands Act (Official Gazette 34/99, 149/99, 32/02, 33/06), Article 2, paragraph 3, the Study proposes not to implement the FPP activities on Pelješac. All activities to be carried out within the FPP shall require the implementation of the procedures of the assessment of the acceptability of the project impact on the ecological network, i.e. the environmental impact assessment during the exploratory, production and decommissioning works. Although the FPP negative impact mitigation measures have been prescribed as environmental objectives, additional precautionary measures have been taken proposing that the FPP planned activities are not implemented in the areas.

Environmental objective: "Good condition of water, soil and air"

 Areas of zones of sanitary protection of sources pursuant to the Ordinance on the Conditions for Determining Zones of Sanitary Protection of Sources (Official Gazette 66/11 and 47/13).  Protected sea coastal area (limitations of 1 000 m from the coast within the continental belt) pursuant to the Physical Planning Act (Official Gazette 153/13)  Areas of all set-up inundation belts and areas of inundation belts which have not been set up within 250 m along the Pannonian Basin watercourses and standing water  Areas of all well set-up inundation belts and areas of inundation belts which have not been set up within 1 000 m along the Dinaride watercourses and standing water  Areas of all set-up inundation belts and areas of inundation belts which have not been set up within 1 000 m along the Pannonian Basin's large rivers

Strategic Environmental Impact Study under the Framework Plan and Programme for Onshore Exploration and Production of Hydrocarbons

Environmental objective: "Good condition of species and habitats"

 Watercourses and standing water in the entire Republic of Croatia  Ramsar sites with the corresponding zone of 1 000 meters around them (Nature Park Kopački rit, Nature Park Lonjsko polje, Nature Park Vransko jezero, Neretva River delta with ornithological reserves and the Crna Mlaka ornithological reserve)  Protected continental areas of the Republic of Croatia (national parks, strict reserves, special reserves, Nature Parks Kopački rit and Lonjsko polje and the Regional Park Mura-Drava in the Pannonian area of the Republic of Croatia as well as all protected karst areas)  Rare habitats of exceptional biological value (internationally significant areas for bats, fens, caves and pits)  Ecological network areas in Chapter 5: Environmental Impact of the Framework Plan and Programme – Impact on the Ecological Network.

Environmental objective: "Protecting human health and the quality of life"

 Exploratory drilling, as well as production drilling rings – working areas, are not permitted within construction areas defined in certain town, i.e. municipality spatial plans, unless otherwise defined in those spatial plans.

Environmental objective: "Providing quality conditions for economic activities"

 P1 and P2 lands in the Dinarides  Conservation forests and special purpose forests

Strategic Environmental Impact Study under the Framework Plan and Programme for Onshore Exploration and Production of Hydrocarbons

Summary map of exclusions and limitations during the implementation of the Framework Plan and Programme for the Onshore Exploration and Production of Hydrocarbons

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