 OIL DISCOVERIES |
Stability has been accomplished. However, up to now, investors have shied away from the Balkans due to its high credit risk.
"The value of Jugopetrol depends first of all on our political situation" admits Nikola Dragomanovic, Managing Director of Jugopetrol Kotor, the national oil and gas authority.
"Yet when foreign capital starts coming in and when we undertake a transparent privatization, the value of Jugopetrol will increase" predicts Dragomanovic.
In fact, Jugopetrol is in the process of privatization, selling 51% of its shares to a foreign investor, and developing new business opportunities in the upstream and downstream markets.
 Offshore potential |
In upstream operations, offshore oil is on the verge of being discovered by Jugopetrol thanks to the creation of a joint venture partnership with Ramco from Scotland.
"Jugopetrol started research long ago, in 1973" says Dragomanovic, outlining the importance of joint venture partnerships to finance exploration. "Jugopetrol is a trade company and we never had enough financial means to invest in oil discovery, since the research activities for oil and gas are the most risky of all activities. That can be done only by the companies already involved in oil production because of the great accumulation, which covers the risk of the research".
There are four off shore drills and one on land, resulting in an investment of more than 100 million dollars since 1973. "The main operator were Buitsgas from Auckland, Chevron, INA, Naftagas from Novi Sad and a group of Slovenian investors...Yet because of the unstable situation during the 1990s, the researches actually stopped" remembers Dragomanovic.
| After abolishing the sanctions, the Scottish company Ramco acquired concessions in the lucrative offshore area from Budva to Ulcinj. It has invested more than 4 million dollars until now, made reinterpretation of previous seismic data, made new seismography in the area covering around 1,000 km and come up with data showing that there are numerous potential locations that should be explored by means of drilling. Estimations predict an equal probability of finding gas and oil.
Drilling is now on the verge of starting. "We haven't yet made the decision which drill would be the first one since there are some surveys that need to be defined. We have certain localities where, with one drill, the potential sources of both gas and oil could be checked while some of them are estimated as potential gas or oil sources," said Dragomanovic.
Reports suggest that the potential for oil and gas could reach up to 3-5 million barrels per year.
| Downstream development |
In the meantime, Dragomanovic is focusing on downstream operations, "refurbishing and modernizing the storage capacity, reconstructing and building new petrol stations, modernizing the transport capacity as well the further improving the information technology system".
The most important capacities of Jugopetrol are its oil installations - there are three of them with a capacity of 120 000 m3, which is more than enough for the needs of the Montenegrin market, because it absorbs around 400 000 tons of all derivatives. "It means that the quantity we have provides three-month supplies in relation to the consumption in Montenegro, states Dragomanovic.
The company is supplying airplanes to the airports in Podgorica and Tivat and has developed a network of 33 petrol stations.
Jugopetrol is practically a monopoly - it owns two thirds of all petrol stations and manages the national oil distribution system. Therefore, a strategic investor will immediately acquire a leading position in the local market, and offer opportunities for further growth in the Adriatic and Balkan markets as well. |
