Joint venture with Serbian NIS spuds first exploration well in Bosnia and Herzegovina
Jadran Naftagas has begun drilling exploration well Obudovac-2 near the village of Obudovac, located within the municipality of Šamac on the territory of the Republika Srpska, an autonomous region within Bosnia and Herzegovina. Jadran Naftagas is a joint venture between the Serbian company NIS , a subsidiary of Gazprom Neft, and the Russian company NeftegazInKor, a subsidiary of JSC Zarubezhneft . This is the first well that Jadran Naftagas will drill in Republika Srpska under a concession agreement executed in 2011 with the Republika Srpska Ministry of Industry, Electric Power Generation, and Mining for the geological exploration and production of hydrocarbons on the territory of the republic. The spot for the well was determined through interpretation of 2D seismic data obtained in the Republika Srpska in 2011-2012. Naftagas Oilfield Services D.O.O., an oilfield services company and subsidiary of NIS, will perform the drilling operations.
The project includes plans to drill another exploration well in 2013 in the municipality of Bijeljina in eastern Republika Srpska. The results of the drilling will shape the next steps.
Historical seismic data have been reinterpreted and two existing wells have been reactivated and put on pilot production on the territory of Republika Srpska. Additional data have been obtained through seismic studies conducted on the Novi Grad — Doboj line (210 kilometers in length), as well as in the Semberija (516 kilometers) and Posavina (310 kilometers) areas, and also on the Banja Luka — Zvornik (303 kilometers) and Banja Luka — Majevica (100 kilometers) lines. Jadran Naftagas invested approximately $13 million in geological exploration in the Republika Srpska in 2011-2012. The studies looked at the geological structure of the territory of the Republika Srpska in order to produce a detailed analysis and the geological model needed to identify the best production areas and to schedule further studies. The results obtained testify to the potential of discovering oil and gas fields on the Republika Srpska territory. Investment in 2013 will reach approximately $19.5 million.
The extant seismic data were processed and interpreted at the NIS Naftagas Research and Development Center. The best locations for putting in the first wells have been identified as a result of joint efforts by NIS Naftagas R & D Center, Gazprom Neft and Zarubezhneft experts. The total volume of investment in geological exploration operations in the Republika Srpska in 2014 will reach $40.7 million. If commercially significant hydrocarbon reserves are discovered there, at least $188 million more will be invested in the project.
Jadran Naftagas and the Republika Srpska Ministry of Industry, Electric Power Generation, and Mining executed the concession agreement for hydrocarbon exploration and production on the territory of the Republika Srpska in 2011. The concession agreement will be effective for 28 years, including three years for geological exploration and 25 years for production. The total investment may reach $229 million.
NIS is one of the largest vertically integrated oil and gas companies in southeastern Europe, and its principal operations consist of the exploration, production, processing and refining of oil and gas, as well as the sale of petroleum products. The company's main shareholders are Gazprom Neft (56.5%) and the Government of the Republic of Serbia. The company owns two oil refineries in Pančevo and Novi Sad and a network of 350 gas stations. NIS operates in the Balkan region, in particular, in such countries as Serbia, Hungary, Romania, Bosnia and Herzegovina, Montenegro, Bulgaria, and Macedonia. It is also participating in a production project in Angola. In 2012, the company produced a total of 1.69 million tons of hydrocarbons and refined 2.142 million tons of oil.
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