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29/02/2024
Mining NewsUncategorized

Montenegro Watchdog Questions Adriatic Oil Deal

As parliament readies to approve concession contracts for oil and gas drilling in the Adriatic Sea, the watchdog body MANS has questioned the public interest in the deal.

Montenegro’s parliament is expected next week to back the draft law approving undersea oil and gas probes, awarded to Italian and Russian companies earlier this year.

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Under the law, the state will get 54 per cent of the profits from any oil and gas production and a special law will regulate the National Petroleum Fund, yet to be formed, to collect the state revenues.

Anti-corruption and environmental organisations claim the law has shortcomings, however, favours foreign companies and fails to protect the public interest.

Last week, parliament’s Legislative Committee authorized three contracts for concessions for the oil and gas projects in Montenegrin waters near the coastal town of Ulcinj, but MPs have yet to ratify the decision.

In February, the government inked concession agreements with the Italian-Russian consortium Eni and Novatek for the first phase of the undersea oil and gas probe.

The main shareholder and chairman of Novatek is Leonid Mikhelson, a Russian tycoon whose fortune Forbes magazine in 2014 estimated at 15.5 billion US dollars.

According to the government’s plan, the probe will cover an area of 3,000 square kilometres.
The contracts oblige foreign companies to perform three required and one service drilling. In the first period of research, the project’s value is set at 85 million euros, and in second about 12 million euros, the government said.

The head of the newly formed Hydrocarbon Administration, Vladan Dubljevic, said he expects the agreements to be ratified in parliament.

“The two companies will jointly search for undersea oil and gas and, if they find commercially viable amounts, will be able to produce hydrocarbon products for 30 to 40 years. The question of the oil fund, to which significant portions of the state’s income will be paid, shall be regulated by a lex specialis,” Drljevic told the parliamentary committee.

The anti-corruption watchdog MANS, however, claimed that the oil and gas deal was controversial. Several provisions of the agreements were “problematic”, it said, because they favoured the oil companies at the expense of the public interest.

“Especially indicative is the stipulation defining ‘force majeure’ events, which, in addition to the usual listing of natural phenomena and disasters, wars, border hostilities, blockades, citizens’ unrest and workers’ strikes, also lists “illegal state actions”’.
This stipulation does not protect the public interest and leaves room for the oil companies to liberally interpret the stipulation in case of legal procedures,” MANS said.

In addition, the final version of the contract has given the oil companies the right to use the national airspace in those locations where they will perform research probes and eventual production, although that was not part of the the original draft of the contract.

source: balkaninsight.com

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