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Adriatic drilling: Interview with oil agency boss Barbara Doric (Includes interview)

The contentious decision to allow oil and gas drilling in Croatia’s pristine Adriatic continues to make the news, with Croatian Prime Minister Zoran Milanovic calling for a referendum on the issue during a television interview on March 4, 2015.

Digital Journal contacted the office of the President of the Management Board of the Croatian Hydrocarbon Agency for her reaction to the news, which was included in our report yesterday. Ms. Doric also kindly agreed to answer some questions in an email interview.

1. Adriatic drilling has been described as tourism suicide for Croatia, whose fragile economy is so reliant on tourism based on its pristine Adriatic coastline. What guarantees can you give that this will be unaffected by your plans to drill for oil and gas? And even if there was no adverse environmental effect, what message do oil platforms in a pristine sea send out as an image for Croatian tourism?

Tourism or exploitation is the wrong question since they can live together with no interference if approached properly. For more than 40 years these two industries have coexisted in Croatia and now we are implementing even stricter standards than we had before. Tourists who are spending their summer vacations in Croatia are not aware of platforms in the Adriatic and their decision on whether or not to come to Croatia is not going to depend on the platforms in the future either. Tourism is the most important industry in our country which cannot and will not be endangered by this project. Our tourist competitors such as Italy, Montenegro, Greece, Malta, Cyprus, France and Spain are either already performing exploration and exploitation of hydrocarbons or are planning to soon.

The Croatian region of Istria and its inhabitants have lived for decades now side by side with platforms, and its tourism image as well as income from tourism are both on a much higher level.

2. You are quoted in the Financial Times as saying that “one of the basic tender requirements was adherence to the highest environmental standards.” Can you give examples of other drilling locations around the world which are adhering to such a high level of environmental standards, without causing any damage?

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In the wake of the 2010 explosion of BP PLC’s oil platform Deepwater Horizon in the Gulf of Mexico, the EU stepped up its rules to protect coastal communities against possible oil spills. In 2013, when Croatia became the EU’s 28th member state, the EU adopted a new directive on safety for offshore oil and gas operations. The Safety Offshore Directive is raising health and safety standards in order to manage the prevention of any potential accidents when it comes to offshore drilling on any “European” sea. Investors will have to meet the strictest EU safety standards for offshore drilling. We have implemented these highest standards and controls for all operations and they will be monitored every step of the way. The Agency will be controlling the implementation of such protection measures. At each stage of exploration and exploitation activities, we are responsible for approving activity plans and technologies and for assuring that everything is done according to the highest environmental standards. The European Commission monitors the implementation of these steps.

The same rules need to be applied to more than 100 platforms currently operating in the Italian part and 18 platforms in the North Adriatic in Croatia. For the last 30 years, we have platforms built during a time when technology and health and safety standards were not developed as they are today, and yet, at no time has the environment preservation ever been threatened.

3. One of the criticism leveled by opponents to the proposed drilling is the fact that the whole process has been rushed, and that there is a lack of experience from people taking the decisions. At 32, you are obviously very successful, but relatively young to be heading the Croatian Hydrocarbon Agency. How long have you been working in the oil sector, and what is your specific experience in that sector?

There will be always criticism no matter what you do and how you do it. In Croatia we have years of economic crisis and corruption behind us, and it is not surprising that people are skeptical in any project led by the Government. When activities are done slowly then the government administration is not efficient, when activities are done in reasonable time then they are not good because they are fast. We have been systematically working on this project for the last two years and are implementing it step by step within the set deadlines from the very beginning. Some individuals learned about the project a few months ago even though we have been transparently communicating every single step form the very beginning.

But please, let me clear up one thing, which has been constantly misrepresented, I am the President of the Management Board of The Croatian Hydrocarbon Agency which acts as operational support to competent bodies in the domain of exploration and exploitation of hydrocarbons, established by the Government of the Republic of Croatia. Therefore, I am not the one who is making the decisions. Croatia has a 40 year history in exploration and exploitation of hydrocarbon, and the Agency is responsible for implementing this project according to the Laws which were introduced by the Government and Parliament of the Republic of Croatia. Regarding my background and experience, I have a long working experience in the energy sector. As a senior consultant, I gained rich experience in leading projects mostly in energy and telecommunication industries in South East Europe. Also, two years ago I joined the Center for Monitoring of the energy sector and investment (CEI) from the very beginning, in addition to other projects I started to develop and implement all required steps related to the exploration and exploitation of hydrocarbons in Croatia. I am living this project from the very beginning, from my previous position to my current position.

4. Regarding those highest environmental standards mentioned above, Marathon Oil, one of the companies granted a license for the Adriatic,  has numerous recent federal fines for not meeting USA security standards (according to numerous online sources), and abandoning dozens of oil rigs and well accidents. Is this not a serious concern and contrary to your assertion of the highest standards?

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Well, I do not know your sources so I cannot comment on that. I know that there was some misleading information in the media, among which was that Marathon Oil is one of the top polluters in the USA, and this is not true. Marathon Petroleum is on that list, and this is a different company which is dealing only with the refinery business, and not exploration and exploitation. It is a well known fact that refineries are the biggest environmental polluters, but yet, here in Croatia, we have a situation where exploration and exploitation is objectionable, and at the same time even the leading activist groups and leaders are strongly against closing the refineries.

According to the industry standards, all chosen companies have great track records when it comes to health and safety as well as environmental standards.

5. Critics claim you hired a consulting agency to prepare the most important document, namely the study on the influence of the environment, an agency with little experience in the field, and one which has only existed for two years. They managed to produce a 500-page SEA in just three months, despite these critics claiming that data from all four seasons (a minimum of 12 months) is required to give credible research results. What do you say to them about this claim?

Preparing a Strategic Study of the Likely Significant Environmental Impact of the Framework Plan and Programme of Exploration and Production of Hydrocarbons in the Adriatic was done in accordance to the Croatian regulatory framework and EU directives. Why there is such lack of understanding I really don’t know, especially when I take into consideration that on a weekly basis we are publicly communicating every single step we do.

This document is only a direction point, which investors will need to implement, and it is focusing on the current status when it comes to the environment while suggesting measures on how to preserve it. When it comes to the environmental current status, all information is known and available since many studies were done. Also, many individual experts in this field were included in the development of particular Strategic Study chapters while the company responsible for the preparation of Strategic Study was coordinating everything. In order to lead these kind of studies you need to have special approval from the Ministry of Environmental and Nature Protection, which the selected company has.

It is important to note that detailed research studies will be required before carrying out any work (seismic survey, exploration drilling, etc.) and they will process every possible impact that exploration and exploitation of hydrocarbons in the Adriatic may have in the future. They will prescribe more measures and more restrictions to ensure the preservation of our Adriatic, and they are binding.

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6. These same critics are saying that the SEA exploration has to be done to establish if off-shore drilling is viable at all. If that viability is not yet established, why have licenses already been granted? The granting of licenses would indicate that the decision has been made, regardless of the outcome of the exploration. And why were the licenses granted before the public consultation?

Such criticism is a result of not knowing the law and the role of specific studies. On January 2nd the Croatian Government issued the decision granting licenses for the exploration and exploitation of hydrocarbons in the Adriatic to companies which had met the highest set of criteria in their offers.
Regardless, the licenses were not granted in the way that companies could immediately engage in offshore research, nor were the contracts with the investors signed. The contracts will be signed once the Strategic Environmental Impact Assessment is adopted.

In the procedure of announcing the first offshore license round, all limitations were set in compliance with all applicable Croatian laws as well as the most stringent EU directives which have yet to enter into our legal framework, which means that we insisted on the strictest criteria for the preservation. As well it was clearly stated that we will enter in the process of Strategic Environmental Impact Assessment.

Your concerns are understandable but we would like to draw your attention to the fact that up until last year Croatia did not have any of the restriction criteria which means that the drilling could have been done in shallow water and also on the islands.

Only when the Strategic Environmental Impact Assessment is finalised and all the restrictions and their aspects are known will the contracts with the investors be signed, since in the contracts we have a couple of articles related to the Strategic Environmental Assessment, which ensure that all the activities planned in future are planned according to the Strategic Environmental Impact Assessment measures.

We must not forget that besides compliance with the studies, the investors will have to request the Review of the eligibility on the ecological network, and if oil or gas should be found before exploitation itself, the studies of the environmental impact will have to be done and they may even show that none of the suggested actions is allowed and cannot be done.

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Also it is important to say that there were two public hearings regarding this project. The first one was held in 2013, before the new Law on exploration and exploitation of hydrocarbons was passed. And the second one was held this past summer on the topic of the Strategic Environmental Impact Assessment Study by whose content the Study was done.

7. At the public presentations of the SEA in Zadar and Sibenik recently, you said that now is not the time to bring up whether or not the drilling should take place at all, but only to give comments on the SEA study. If now is not the time to bring up whether or drilling should take place, when is the right time?

The question for or against the project is certainly not the question for me. I am leading the Croatian Hydrocarbon Agency as well as this project according to the regulatory framework set by the Government and Parliament of the Republic of Croatia. My attitude on that is completely clear. Croatia has been doing it for the last 4 decades, has great experiences so far and now we are inducing even higher standards. Italy has over 100 gas-platforms and 38 oil rigs, Montenegro is going right now through this process and so is Albania and Greece. The thing we need to fight for is that we use our benefits in a secure way and that all other countries that we share our Adriatic with, share and accomplish the same, or better, the highest standards. If an accident happens in a neighboring country our part of the Adriatic will suffer as well. Do we really want to share the risk with the rest of the countries on the Adriatic without gaining any benefits for us?

8. In an age where European countries are moving to renewable energies such as solar power, it would seem logical that Croatia – one of the sunniest places in Europe – followed suit, and yet you stated in Zadar a few weeks ago that there is no future for solar energy in Croatia. Why do you claim such a thing, and why is Croatia different to Germany in this respect in your opinion, despite having a lot more sun? 

It is not true that I said that there is no future for solar energy in Croatia. It is unlikely that in the near future, and I mean decades, solar energy could adequately replace the need for fossil fuels. The renewable sources are most welcome and Croatia is developing in that direction, but today we are still no closer to the revelation of the alternative solution that could replace world’s need for oil and gas. That means that without oil and gas there is no industry or the industrial growth. If science should develop in that direction at the pace we estimate it will develop, we are at least decades away from that solution.

9. Let’s assume the drilling goes ahead. Despite the highest environmental standards, an environmental tragedy on the scale of the Gulf of Mexico happens. How will you explain that and your role in the whole process to the next generation?

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You are again setting your thesis completely wrong. The Agency’s task is to maximize the benefit for the Croatian citizens from the exploration and exploitation of hydrocarbons and not to make the decision whether to go in this project or not. I am very satisfied that after 40 years that the project has transparently communicated with the public through our Agency. Also we are introducing the highest standards in accordance with the best international practices and regulations that apply to members of the EU. The limitations that we introduce as the way of protecting other industries such as tourism and fisheries did not exist a year ago. Unfortunately, a year ago nobody was interested in the subject, but that doesn’t mean that the exploration and exploitation in the Adriatic did not happen even a year ago. I am very proud of my role in changing our exploration and exploitation opportunities in a way that they will bring significant benefits for my country’s economy and that we have assured the protection of the Adriatic Sea with the implementation of the highest environmental standards and protection.

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