The Hydrocarbon Administration continued in the second half of this year to prepare the necessary documentation for announcing a new public tender for the concession contracts for oil exploration in Montenegro’s offshore area. In order to complete the tender documentation, a simple public procurement will be announced for consulting services in the field of legal advice during the preparation and execution of the public tender.
The public procurement plan is currently undergoing verification, after which the process is expected to begin, ultimately leading to the announcement of the public tender for exploration.
This is stated in the report on the activities related to hydrocarbon exploration and production in Montenegro’s offshore area for the period from July to December this year.
As noted, hydrocarbon exploration is recognized as an activity of exceptional importance for Montenegro. The discovery of hydrocarbons in Montenegro’s offshore area would lead to the development of a new industry, with its economic benefits impacting the country’s standard of living and economic development.
The report states that, in accordance with the Law on Hydrocarbon Exploration and Production, the Hydrocarbon Administration is responsible for performing administrative and technical tasks related to hydrocarbon exploration and production. The Law defines two types of concession contracts: a concession for hydrocarbon exploration and a concession for hydrocarbon production.
- With a concession for hydrocarbon production, the concessionaire is given the right to conduct hydrocarbon exploration, including production, as was the case with the ENI/Novatek and Energean concessions. A concession for hydrocarbon exploration gives the concessionaire the right to conduct geological and geophysical surveys without the right to drill exploration wells or produce hydrocarbons. The goal of announcing the public tender and concluding the concession contract for exploration is to increase knowledge about Montenegro’s offshore hydrocarbon potential, aiming to find commercial reserves of oil and gas, as explained.
The implementation of the exploration concession contract will provide Montenegro with new geophysical data for offshore areas that are not currently covered by production concession contracts and remain unexplored.
- This will eventually lead to the successful awarding of new concession contracts for hydrocarbon production, similar to those with ENI-Novatek and Energean, potentially culminating in the discovery of commercial oil and gas reserves.
According to the report, the concession contract for exploration grants the concessionaire the right, at their own expense and risk, to acquire, process, reprocess, interpret, market, and sell seismic and other data obtained during the contract’s implementation.
The data acquired during the implementation of the concession contract is owned by Montenegro, although the concessionaire is allowed to sell it to interested oil companies and third parties at agreed prices, with the revenue from sales shared between the concessionaire and the state of Montenegro.
- Additionally, since there is oil and gas production on land in Albania and hydrocarbon exploration is planned in the Republic of Srpska, there is interest from companies in the industry for exploring the land in Montenegro, the document states.
Before concrete actions are taken regarding new activities related to hydrocarbon exploration and production in Montenegro’s offshore or onshore areas, the Hydrocarbon Administration is actively working to ensure compliance of potential projects with new public policies and the development of the energy sector and environmental protection in Montenegro and the European Union.
The Law on Oil Product Supply Security, effective from December 13, 2024, defines the role of the Hydrocarbon Administration as the governmental body responsible for forming mandatory reserves of oil products. The Administration has actively participated in planning and preparing activities to implement the obligations arising from this Law.
- The Law on Hydrocarbon Exploration and Production and concession contracts also stipulate the obligation for the concessionaire to prepare and fund training plans for public sector employees, and where feasible, allow and finance their participation in internal training activities organized by the concessionaire or its affiliated entities.
The document also mentions that in the fourth quarter, representatives of the Hydrocarbon Administration participated in training in Zagreb, focusing on the development of the gas business, LNG operations, and gas storage. The training included technical and commercial aspects of the sector, as well as visits to key facilities such as the LNG terminal on Krk Island and the underground gas storage at PSP Okoli.
Additionally, training for working with Petrel software was conducted, aimed at improving technical skills in handling complex geophysical data, visualization, data analysis, and geological-geophysical modeling, thereby enhancing resource management and improving understanding of upstream activities.
