Zoltán Áldott: A New Phase of Growth on Solid Foundations

The year coming to a close has been particularly challenging for the oil industry, as the supply exceeding demand has caused an imbalance in the oil market, resulting in prices for this energy source being half of what they were in 2014.

Although we expect a gradual rebalancing in the time ahead, this does not mean we will witness a significant increase in oil prices in 2016. Nevertheless, our plans for the coming year are ambitious, and we remain committed to strong growth across all segments of our operations.

Large Investment in Rijeka Recent macroeconomic indicators suggest that a positive year awaits Croatia, and at INA, we hope that 2016 will mark the beginning of a new phase of development and growth for both the Croatian economy and our company. We have diligently built the foundations for this new phase over the past years, and the efforts of INA’s management have strengthened our financial position and reduced debt, which has increased our flexibility for potential portfolio expansion and allowed us to focus on international projects. In line with this, we plan to continue investing in the exploration and production of oil and gas, launching new projects as well as existing large projects such as ‘EOR’ and the ‘Međimurje’ project. I am pleased to highlight that despite the significantly negative impact of halved prices in the first nine months of this year, we invested nearly one billion kuna in exploration and production, most of which was allocated to oil and gas exploration and production projects in Croatia. In our refining business, our main mission is to create a profitable and sustainable refining operation, investing in projects that can ensure returns for the company and its shareholders, thereby making a strong contribution to the results. Notably, we have a planned investment in a heavy residue processing facility at the Rijeka Oil Refinery, estimated at 400 million dollars, making it one of the largest investments in Croatia. In our retail business, we continue to modernize and expand our offerings for our customers, and the increase in competitiveness and further enhancement of service quality at INA’s gas stations will be ensured by the recently established subsidiary company, INA MS.

Challenge of Low Oil Prices Along with our ambitious plans, we at INA are very aware of the challenges that await us in 2016, with the aforementioned low oil price being the primary concern, which will directly affect the profitability of INA’s exploration and production segment. In such circumstances, the profitability of the refining business becomes even more important, making the need for further improvements and increased competitiveness in this segment of the business now urgent. Although 2016 will be another challenging year for the oil industry, INA enters it strengthened by stable EBITDA and a healthy financial foundation, which ensures we have the prerequisites for continuing the investment cycle and improving the operations of all core activities.