Bosnia to start talks on oil exploration concession with Shell in Feb 2014

By bne IntelliNews December 2, 2013

Bosnia’s Muslim-Croat Federation plans to start talks on an oil concession deal with a unit of Royal Dutch Shell in February and wrap up the talks within nine months, the Federation’s energy minister Erdal Trhulj told Reuters on Dec 2.

Prior to launching the talks, the government will hire a consultant who will negotiate on its behalf. A concession contact is expected to be awarded at the end of 2014, Trhulj said. The investment is seen in the range of USD 300-700mn, depending on the number of drilling sites.

Trhulj said in October that Shell Exploration Company had completed all necessary analyses and submitted an official letter of intend to enter into negotiations on oil and gas exploration and exploitation concession with the Federation. Trhulj was speaking after a meeting of the commission, which follows the implementation of the two-year memorandum of understanding signed by Shell and the Federation’s government in November 2011.

The memorandum will most likely be extended by one year since the negotiations on awarding the concession last between six and nine months according to the law. The implementation of the memorandum was awaiting the Federation’s oil and gas exploration and exploitation law, which was adopted on September 13, 2013.

Under the memorandum, in case Shell discovers oil and gas reserves it should start exploiting them in 2015. The company intends to drill in the Dinaric Alps area – from the towns of Bihac (northwest) and Livno (west) to the southern towns of Mostar and Neum (Bosnia’s only access to the Adriatic Sea).

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