Ina Begins Exploration of Gas Shales

Ina is embarking on an investment worth over 100 million kuna, a pilot project for the exploration of unconventional gas deposits in the Pannonian part of Croatia, and expects the project to be realized by the end of the year.

This was emphasized by Lilit Cota, director of Ina’s Exploration Projects Department, at the 28th International Scientific and Professional Meeting of Gas Experts in Opatija. 

Ina is preparing to examine three deposits at five locations in the Pannonian part of Croatia – unconventional oil sources in Posavina, gas shales in Međimurje, and low-permeability sandstones in Podravina.
– A boom in unconventional sources is not expected in the European market in the next ten years, but we expect to achieve a small boom in the Croatian market and gain benefits through an increase in onshore gas reserves – Cota emphasized.
Speaking about predictions for the global energy mix, Cota highlighted that the future still lies in fossil fuels, biomass is declining, and coal continues to surprisingly hold up well. Proven global gas reserves amount to 210 trillion cubic meters, she continued, and estimates for gas from shales are nearly at the same level.
While gas prices are generally rising, the situation in the U.S. due to shales is different, and prices are lower than in Europe. European projects, among other things, cannot be competitive due to drilling costs, which are significantly lower in the U.S.: averaging around five million dollars, while in Europe it ranges between 11 and 20 million dollars. Poland was the first to open the door to the exploration of unconventional deposits, but many countries in Europe are actually not open to this type of exploration.

Does market liberalization really bring lower gas prices to Croatia? Energy expert Stevo Kolundžić views this through two approaches. According to experiences from other countries, prices began to fall after the introduction of the liberalization process, and then rose. However, the question is how much they would have risen without liberalization.
– Personally, I believe that prices would be significantly higher had the liberalization process not been initiated in Europe – Kolundžić believes, who reiterated that tectonic changes have already occurred in the gas market due to the influence of the American story and their shale gas production, for which they have already found buyers in Europe. The fact is that gas prices have fallen since the shale gas story ‘took off’, but they have also fallen because Qatar, after Russia, is one of the largest gas exporters, then lost its market in Europe. On the other hand, Fukushima happened, China and India are emerging as importers, and now Australia is also growing with gas exports. The existing three gas markets, the U.S., Europe, and the Far East, have further differentiated in price. It is difficult to say to what extent Australia will influence.
– No major shifts in falling gas prices are expected. Prices are expected to stagnate. For more than 15 years, the prices of coal and gas have moved in parallel. Coal could be in a situation where its price falls, but if it is true that gas prices could remain less tied to oil prices, it is to be expected that prices will move in parallel – thinks energy expert Stevo Kolundžić.