Dutch firm Shell Exploration Company has completed all necessary analyses and submitted an official letter of intend to enter into negotiations on oil and gas exploration and exploitation concession with Bosnia’s Muslim-Croat Federation, daily Nezavisne Novine reported, quoting the Federation’s energy minister Erdal Trhulj.

Trhulj made the statement 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.

He said the commission will propose to the government to extend the memorandum 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 only on September 13 this year.

The government will now also need additional time to select a consultant, which will lead the talks on its behalf.

A successful outcome of the talks would enable Shell to set up a company in Sarajevo in the autumn of 2014 and launch exploration works.

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).