The Croatian government plans to seek the
resumption in the middle of next month of talks with Hungary's MOL over the
joint management of Zagreb-based oil and gas company INA, the
Adriatic country's economy minister Ivan Vrdoljak said in an interview on
Monday.
MOL owns 49.08% of INA and the Croatian government controls a
further 44.84%. In September 2013, the two sides launched talks to renegotiate
the terms for the company's management.
"We hired foreign backers which
should help us finalize the negotiation process," Vrdoljak said in an interview
with local daily Jutarnji List posted on the website of the Croatian
government.
"Croatia's position has not changed. We can not accept that
INA is run on the basis of a contract for which former prime minister Ivo
Sanader went to prison. We propose a new shareholder contract and an agreement
on a new development strategy for INA as a regional, vertically integrated
company," the official said.
In 2012 Sanader was found guilty of
acceptingfour years earlier a bribe from MOL to let it take a dominant position
in INA even though it does not control a majority stake in the Croatian company.
Sanader was sentenced to 10 years in prison.
As the largest Croatian oil
company and a company of strategic importance for the country, Ina should have a
highly developed production of crude oil and gas and therefore must have the
refining capacity to at least cover domestic demand, Vrdoljak said.
In
August 2013, the Croatian government said the decision to renegotiate the terms
of the management of INA came on the back of the deteriorating performance of
the Zagreb-based company over the past years and underinvestment in its
refineries, among other issues.
In November, two months after the launch
of talks, MOL said its executive board had been authorized to start preparations
for the sale of the company’s stake in INA.
On the backdrop of the
ongoing negotiations, MOL filed in November 2013 for international arbitration
against the government in Zagreb at the World Bank’s International Centre for
Settlement of Investment Disputes for breaching certain of its obligations in
relation to the Hungarian company's investments in Croatia. Then in January, the
Croatian government filed for arbitration with the Permanent Court of
Arbitration in The Hague.
Vrdoljak said he expects the arbitration
proceedings to wrap up in the second quarter of next year, most probably with a
positive outcome for the Croatian side.
The minister also said in the
interview that the government in Zagreb plans an initial public offering (IPO)
of state-owned energy utility HEP. The utility would use the proceeds from the
IPO to help acquire regional companies and expand its footprint
abroad.
While financially strong, HEP should be eyeing acquisitions in
Slovenia, Bosnia, Montenegro, Hungary and Italy and this opportunity will exist
only for one or two more years, Vrdoljak said, cautioning that without this
acquisition push, the Croatian utility company could end up itself needing a
strategic partner.
HEP group owns and operates over 4,000 MW of installed
generation capacity and 974 MW of heat production capacity, including 25
hydroelectric plants and eight thermal power plants fired by oil, natural gas or
coal.
INA's consolidated loss rose 26% to 1.9 billion kuna ($272
million/249 million euro) in 2014.