Oil Firms Quit Croatia Over Montenegro Border Row

Croatian economy minister Ivan Vrdoljak confirmed on Tuesday that Austrian energy company OMV and US firm Marathon Oil Corporation have decided not to sign contracts for to search for and extract gas and oil from Croatia's Adriatic Sea, one of the country's major energy projects.

The two companies made the decision because of a maritime border dispute between Croatia and Montenegro, just after another territorial dispute over contested waters between Croatia and Slovenia flared up.

"It is true; we will not conclude the negotiations with Marathon Oil and OMV. We could not accept the conditions set by the other party [Marathon Oil and OMV]," Vrdoljak said.

"In the background is the problem of the border with Montenegro; and it is true, it has been a problem from day one," he added.

He said the companies initially agreed to a Croatian government proposal that suggested a bilateral memorandum with Montenegro would enable them to work freely despite the border dispute, but then informed Zagreb on Monday that they were pulling out.

The Croatian government gave OMV and Marathon Oil the licence for seven hydrocarbon exploration and exploitation zones in the central and southern Adriatic in January. Three of these zones are in waters disputed by the two countries.

The companies have already invested nine million euro in the project.

Croatia will now put the seven exploration zones out to tender again, but the process has already fallen behind schedule.

The contract signing was first scheduled for April, then postponed for June due to concerns raised by Croatia's maritime neighbours - Italy, Slovenia and Montenegro - and afterwards moved again to September.

Croatia launched the tender for hydrocarbon exploration and...