Among other things, Crodiaspora’s 2020 Summit has shed light on the massive potential in the national energy industry, opening the door for significant investment. As macroeconomist, Goran Šaravanja and upstream oil and gas expert, George Kovačić highlight general market trends while contextualizing Croatia’s place in the industry, their professional insights showcase the untapped potential in Croatian energy.
Goran and George’s full panel video (below at the end of the article), previewing the top-quality content and productive conversations sparked by Crodiaspora. These important initiatives will continue to be brought up by Crodiaspora among its membership. This year’s Crodiaspora Summit fees are all set to be converted to membership fees, so if you haven’t already purchased the summit, doing so will open up additional beyond this summit alone. Over time, members will get unique access to future informative webinars, information regarding the organization’s task forces and goals, and Crodiaspora merchandise.
As most are aware, renewable sources of energy rising in demand because of their environmental benefits at large. In considering this, it must be noted that Croatia ranks 8th in the European Union in share of renewable energy as part of total demand. This accomplishment can be attributed to the fact that Croatia has a significant capacity for hydropower which it has worked to tap into. Such an advantage in renewable energy has also allowed Croatia to prematurely meet its 2030 EU Climate Change targets.
When it comes to consumption, Croatians use very little energy per capita in comparison to other EU countries. Austria leads consumption per capita at 167.5 gigajoules, while Croatia trails that by over half, at 82.3 gigajoules per capita. Despite consuming so little though, Croatia actually does so rather inefficiently.
Changing focus to the sources of Croatian energy, while the country is well equipped geographically to pursue effective renewable sources, it must be noted that this pathway would prove to be very expensive, especially considering the Croatian economy is still acclimating to the European economy. As previously mentioned though, Croatia already ranks admirably in terms of renewable energy as share of demand, but expanding this further may require some form of subsidization from the EU.
Aside from renewables, Croatia has prime opportunities in onshore and offshore oil and gas production as well as liquefied natural gas and its accompanying transportation infrastructure. The LNG terminal on the island of Krk is soon to be operational in early 2021, linking energy interests with neighbours Slovenia and Hungary, which in turn reinforces positive foreign and business relations. This interconnected energy system allows Croatia to be a more depended on regional partner with nations like not only Slovenia and Hungary but also Bosnia and Herzegovina and Serbia.
Because of the communist regime that suppressed Croatian progress as well as the subsequent Homeland War, it remains a real possibility that there are significant energy sources still untapped throughout the country and region. With this in mind, by increasing activity in the domestic energy industry, competition can vastly open up the market across the board, bringing new high-level jobs and revenue, decreasing import dependency, stimulating environmental innovation, and largely modernizing the Croatian nation.
Offshore oil and gas ventures have always been a touchy subject in the energy industry, especially in consideration of environmental and tourism impacts. Thankfully, Croatia has laws and regulations prohibiting near-shore ventures like this, which would leave the environment and tourism most vulnerable. Having said that, it is important to consider the potential for Croatian oil and gas ventures further out in the Adriatic. This is something that our direct neighbours on the Adriatic, the Italians, have been doing for decades. By drilling further out in the Adriatic, beyond all the islands, Croatia will be able to safely produce a much greater amount of its natural resources which will then stimulate local economies all along the coast.
Another thing to consider is the management of natural oil and gas seeps in the Adriatic, and there are many. It is a natural occurrence for oil and gas to sometimes bubble up from the seafloor, creating oil slicks and gas bubble plumes, damaging to environmental integrity. To better address this, Croatia needs to invest in specific technologies to exploit these seeps, while at the same time, protecting the environment in the Adriatic. Doing so will also facilitate the identification of significant oil and gas pockets under the sea which can be harnessed for energy and to fuel the economy at large.
With over 200 offshore leads identified, interest is ripe among key players in the global and more local energy industry to explore and produce oil and gas in Croatia. If the green light is given on these projects, Croatians especially living along the coast will have much to hope for in the way of high paying jobs, which will also inevitably keep Croatians in Croatia, which, as we all are aware, is one of the most pressing objectives for the country at this point in time.
Looking now to onshore oil and gas potential, Croatia is gifted with real opportunity in the Pannonian Basin, otherwise largely recognized as the region of Slavonia. With support and cooperation from the government by granting exploration licenses, the last few years have seen promising preliminary results, prompting Vermilion to invest in a gas plant in Vukovar, opening in 2022.
Overall, Croatia clearly has the trade and domestic production capacity to be a leader in the regional energy industry. As top global energy firms circle, the anticipation is growing for what will become of not only Croatia’s offshore and onshore oil and gas industry, but also its renewable sector, highly renowned within the European Union. As energy experts begin reaching out, investment is soon to follow with the support of the Croatian government.
Video of the panel below: