Framework Plan and Programe for Onshore Exploration and Production of Hydrocarbons
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FRAMEWORK PLAN AND PROGRAME FOR ONSHORE EXPLORATION AND PRODUCTION OF HYDROCARBONS Zagreb, August 2015 1 INTRODUCTION ........................................................................................................................... 3 1.1 OVERVIEW OF ONSHORE EXPLORATION AND PRODUCTION OF HYDROCARBONS ............................................................................................................................ 3 1.2 REGULATORY FRAMEWORK ........................................................................................... 4 2 EXPLORATION BLOCKS ............................................................................................................ 7 3 EXPLORATION PERIOD ............................................................................................................ 10 3.1 EXPLORATION OF HYDROCARBONS ........................................................................... 10 3.2 EXPLORATION OPERATIONS ......................................................................................... 10 4 PRODUCTION PERIOD .............................................................................................................. 20 4.1 PRODUCTION OF HYDROCARBONS ............................................................................. 20 4.2 PRODUCTION WORKS ...................................................................................................... 20 5 LIMITATIONS AND ENVIRONMENTAL PROTECTION MEASURES DURING THE FRAMEWORK PLAN AND PROGRAMME IMPLEMENTATION ................................................. 25 5.1 OVERVIEW OF ALL LIMITATIONS AND ENVIRONMENTAL PROTECTION MEASURES IN THE AREA OF THE FRAMEWORK PLAN AND PROGRAMME IMPLEMENTATION ....................................................................................................................... 25 5.2 OVERVIEW OF EXCLUSIONS AND LIMITATIONS ACCORDING TO BLOCKS ...... 32 NORTH-WESTERN CROATIA – 01 EXPLORATION BLOCK (SZH – 01) ............................ 32 DRAVA – 02 EXPLORATION BLOCK (DR – 02) .................................................................... 36 DRAVA – 03 EXPLORATION BLOCK (DR – 03) .................................................................... 40 DRAVA – 04 EXPLORATION BLOCK (DR – 04) .................................................................... 44 NORTH-WESTERN CROATIA – 05 EXPLORATION BLOCK (SZH – 05) ............................ 48 SAVA – 06 EXPLORATION BLOCK (SA – 06) ........................................................................ 51 SAVA – 07 EXPLORATION BLOCK (SA – 07) ........................................................................ 55 SAVA – 08 EXPLORATION BLOCK (SA – 08) ........................................................................ 59 SAVA – 09 EXPLORATION BLOCK (SA – 09) ........................................................................ 63 SAVA – 10 EXPLORATION BLOCK (SA – 10) ........................................................................ 66 SAVA – 11 EXPLORATION BLOCK (SA – 11) ........................................................................ 70 SAVA – 12 EXPLORATION BLOCK (SA – 12) ........................................................................ 74 DINARIDES – 13 EXPLORATION BLOCK (DI – 13) .............................................................. 78 DINARIDES – 14 EXPLORATION BLOCK (DI – 14) .............................................................. 82 DINARIDES – 15 EXPLORATION BLOCK (DI – 15) .............................................................. 86 DINARIDES – 16 EXPLORATION BLOCK (DI – 16) .............................................................. 90 6 ENVIRONMENTAL MONITORING PROGRAMME ............................................................... 94 2 1 INTRODUCTION 1.1 OVERVIEW OF ONSHORE EXPLORATION AND PRODUCTION OF HYDROCARBONS Oil seeps have been present in the Republic of Croatia for centuries. A natural oil seep near the Mikleuška settlement was first mentioned in 1391 in a Deed of donation of a wealthy feudal family Čupor from Moslavina. The family donated the Paklenica lot (Terram Paklencz) near the village of Paklenica to the Pauline Fathers monastic order (Pavlini) in the small town of Garić. The name of the lot, which was named after paklina (oil seep), confirms that the oil seeps were present even back then. Their existence has been documented and filed in the Hungarian State Archives in Budapest. The legal procedure behind the exploration and production of ore and maltha was regulated with the adoption of the General Austrian Mining Act on 23 May 1854. It was pursuant to that act that the Mining Authority in Zagreb (Rudarsko glavarstvo u Zagrebu) issued on 1 August 1855 the first “digging permit” for oil exploration in Peklenica (Međimurje) to entrepreneur Hyacinth Riban and to Martin Hermann for Voloder-Mikleuška (Moslavina). Organised mining-based oil extraction began in 1955 in Peklenica and Voloder-Mikleuška, followed by Baćindol, Staro Petrovo Selo etc. Back in 1941 when the mining methods were still used to extract oil from the “Martin” oil window, German company Petrol d.d. used deep drilling methods and discovered the first oil field in Croatia, Gojlo, in the eastern part of Moslavina. Between 50 and 70 tonnes of oil were produced every day from the 700 meters deep wells. The first gas field in Croatia, Bujavica, was discovered in 1917. The exploration and production of hydrocarbons went into full swing in 1952. Currently, there are 54 production fields located in the continental area of the Republic of Croatia. The approved production fields are used to obtain oil, condensate and natural gas. A total amount of 92 million tonnes of oil, around 9 million tonnes of condensate and 60 billion m3 of natural gas have been recovered since 1941, when the onshore hydrocarbon production in the Republic of Croatia was first recorded. Around 3,233 wells were drilled, out of which 918 were exploration wells. The largest annual recovered oil amount in Croatia was recorded in 1981 and it totalled 3,140,777 tonnes. Meanwhile, the largest recovered natural gas amount of 2,176,657,000 m3was recorded in 1989. The annual recovery in the continental area of the Republic of Croatia currently amounts to 500,000 tonnes of oil and condensate and 725,594,966 m3 of gas. Some of the large onshore hydrocarbon production fields in the Republic of Croatia are as follows: Beničanci, Stružec, Žutica, Šandrovac, Ivanić, Lipovljani, Jamarice, Đeletovci, Jagnjedovac and Bilogora, and some of the large onshore gas fields in the Republic of Croatia are: Molve, Bokšić, Kalinovac, Stari Gradac and Okoli. Hydrocarbons have been proven to exist and hydrocarbons are recovered in every part of the continental Croatia's Pannonian Basin, while non-commercial hydrocarbon amounts have been 3 discovered in the Dinarides (gas was discovered on the island of Brač in the Brač-1 well in 1979 and oil was recorded in 1966 in the Ravni kotari-2 well). Nine wells were set up in the Dinarides (onshore) in the period between 1959 and 1989, their final depths ranging from 250 m (Bru-1P) to 5 600 m (Nin-1A). The wells are: Ravni Kotari-1 (RK-1) (1959; 4,535.1 m), Bruvno-1Plitka (Bru-1P) (1962; 250 m), Bruvno-1 (Bru-1) (1962.; 710.9 m), Bruvno-1A (Bru-1A) (1963; 3,380.4 m) Boraja-1 (Bo-1) (1964; 4,168.7 m), Ravni Kotari-2 (RK-2) (1966; 3,507.4 m), Nin-1Alfa (Nin-1A) (1975; 5 600 m), Poljica-1 AlfaBeta (Polj-1AB) (1979, 5 515 m) and Leščanka-1 (Lšk-1) (1989; 602 m). There have been no significant exploration activities in the Dinarides in the past 25 years. With a view to optimally use its abundant mining resources and encourage investments into new hydrocarbon exploration in the Republic of Croatia, a new regulatory framework was adopted in 2013 compliant with European Union Directives as well as the best international practices. 1.2 REGULATORY FRAMEWORK A change of economic environment and an increasing interest of foreign investors for whom a higher level of legal certainty and flexibility in terms of business interest realisation had to be ensured in order for them to invest into exploration and production of hydrocarbons have pointed to a need to regulate the hydrocarbon exploration and production procedures in a manner defined and accepted worldwide. Considering the fact that oil production in the Republic of Croatia decreased by 28.5% in the period from 2007 to 2013, with the gas production recording a decrease by 34.6%, and since there had been no significant investments into exploration activities which would have led to new commercial hydrocarbon discoveries, it was necessary to modify the regulatory framework by encouraging new investments. The European Union's biggest challenge is oil and gas supply security and reliability, and the new discoveries will potentially provide the Republic of Croatia and its surrounding regions with energy independence and decreased energy-related dependence within the European Union. With a view of attracting and encouraging investments into exploration and production of hydrocarbons in the Republic of Croatia, a new Mining Act has been adopted (Official Gazette No. 56/2013 and 14/2014), as well as the Act on Exploration and Production of Hydrocarbons (Official Gazette No. 94/2013 and 14/2014) (hereinafter: “Act”), regulating hydrocarbon exploration and production activities, which is in compliance with all European Union directives as well as the best international practices of countries with long-term experience in exploration and production of hydrocarbons. With a view