As per media releases, the government of Croatia has awarded seven licenses to a consortium of Marathon Oil Corporation (MRO) and OMV Aktiengesellschaft to carry out exploration activities for hydrocarbons in the Adriatic Sea. Houston-based Marathon Oil is an upstream energy player while OMV is an integrated oil and gas firm in Vienna.
The government has also allotted two licenses to INA-Industrija Nafte – an energy firm owned by integrated Hungarian player MOL Nyrt and Croatian government – and one license to a consortium of Eni SpA (E) of Italy and Medoilgas of UK, for exploring the same area.
The three groups got licenses to explore off the coast of Adriatic Sea for five years. During the period, the consortiums might invest roughly $630 million in the upstream operations.
The government is expected to sign the exploration deals with the winning bidders within Apr 2.
Since 2009, Croatia has been going through a phase of recession. The government believes that the considerable reserves − which can be as much as 3 billion barrels of oil equivalent – worth billions of dollars in the Adriatic Sea will help to recover the economy.
Hence, with strong oil and gas deposits ready to be explored, we can say that the economy of Croatia will no longer have to depend solely on tourists visiting the country’s Adriatic coast.
Marathon Oil and Eni SpA, the members of the consortiums, currently carry a Zacks Rank #5 (Strong Sell), implying that the stocks will significantly underperform the broader U.S. equity market over the next one to three months.
Meanwhile, better-ranked players in the energy sector include Spectra Energy Partners LP (SEP) and Seadrill Partners LLC (SDLP). Both stocks sport a Zacks Rank #1 (Strong Buy).
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