Oil and gas sector in Croatia

In 2020, oil and petroleum products accounted for 33,7% of Croatia`s energy mix, followed by natural gas (30,3%), renewables and solid biomass (26,4%), electricity (4,8%), solid fossil fuels (4,3%), and non-renewable waste (0,5%). Liquid fuels and natural gas accounted for the highest share in Croatia’s total primary energy supply, 29,1% and 24,7%, respectively. Data for 2021 indicate that Croatia produced 15 210,4 GWh of electricity: 7228,7 GWh by hydropower plants, followed by 5771,0 GWh from thermal power plants, 2061,8 GWh from wind power plants, and only 148,9 GWh from solar power plants.

The nuclear power plant Krsko, jointly owned by Croatia and Slovenia (each owning 50%), produced 2709 GWh of electricity for Croatian needs. The total electricity consumption in 2021 was 19 171,4 GWh. Thus, the net import amounted to 3961 GWh or approximately 21% of total consumption. The ratio of total production to consumption was approximately 79%. Dominant consumption by sectors is that of business (10 230 276 MWh), followed by households (6 596 361 MWh) and public lighting (340 395 MWh).

Reserves and infrastructure

Croatia has no significant fossil fuels reserves. For example, the share of oil reserves in Croatia relative to the world`s reserves is 0,004%, and natural gas 0,0124%. In terms of tons of oil equivalent, according to 2024 data, conventional proved reserves by fuel type were: 30,1% – oil, and 69,9% – gas.

In 2022 in Croatia, the total primary energy production was 0,088 quadrillion Btu, while consumption was at 0,302 quadrillion Btu. Thus, the share of domestic production in primary energy consumption was 29,1%. This shows that Croatia is a country extremely dependent on energy imports. Primary energy consumption is dominated by oil – 38%, ahead of natural gas –29% and renewable resources – 28%. Coal accounts for the smallest share here – about 5%.
Croatia’s minor production of oil and natural gas has steadily declined over the past two decades, barring a few local spikes in production.

Natural gas production in Croatia is performed mainly in offshore areas in the southwest of the country. The gas reserves in the fields are small. For example, the reserves of the Annamaria Gas Field are estimated at 10 billion cubic meters and the Izabela Offshore Gas Field at 1,4 billion cubic meters. A network of gas pipelines with a total length of about 2500 km connects the western, eastern and southern regions of the country. Not far from the port of Omisalj, a floating LNG terminal with a capacity of 2,9 billion cubic meters is located on the island of Krk.

The Croatian oil industry is represented by several small fields with total reserves of 71 million bbl, an oil terminal in Omisalj, a network of oil storage tanks, two refineries, and an oil pipeline originating in Omisalj and branching in Sisak to Szazhalombatta Refinery in Hungary and refineries in Serbia. Croatia’s Rijeka Refinery and Sisak Refinery have a combined capacity of 90 000 bbl/d and are operated by INA.

Energy dependency

In 2021 Croatia`s total primary energy supply amounted to approximately 413 GPJ, of which liquid fuels (fossil) covered 120 PJ, natural gas 102 GPJ, and hydropower 64 PJ. Total energy import was 321 GPJ, while total energy export was 123 PJ. Thus, the net energy import amounted to 198 GPJ, approximately 47,9% of the primary energy supply.

In 2020 Croatia`s energy dependency rate was 53,6% (whereas in 2021, it was 52,1%), below the EU27 average of 57,5%. It is assumed that 80% of Croatian energy net imports are from Russia, with a dependency of 24,7% on energy imports. In 2020, Croatia had a 74,7% dependency on Russia for coal, 55% on natural gas, and 14,2% on oil.

The national oil and gas company INA is co-owned by the Hungarian oil company MOL (with a 49,08% share), the Croatian government (with a 44,84% share), and institutional and private investors (6,08% share), with MOL having the majority on the Management Board and in effect managing the company. This leaves Croatia in a very dependent and vulnerable situation regarding the production and supply of oil and oil derivatives (dominantly gasoline and diesel), and despite having its own active oil and gas fields and refinery, INA has been constantly decreasing its production. This is especially the case regarding natural gas production and supply, where INA has practically left the dominant position to the company Prvo plinarsko drustvo (PPD), which is essentially a local partner of Gazprom and is supplying customers through a ten-year contract with the Russian company.

Impact of the Ukraine war

The main impact of the Ukraine war and the EU sanctions on Croatia`s energy sector so far have been related to the drastic increase/fluctuation of energy prices (natural gas, electricity) which negatively affected the overall economy. In September 2022, the Croatian government adopted a decision through which regulated energy prices were prescribed for October 2022 to March 2023, and this decision was renewed in April 2023. The main burden of the regulated energy prices has fallen on the national energy company HEP Group, which estimated its resulting losses for the period October 2022 to March 2023 at approximately EUR 800 million, while a similar estimation of losses has been announced due to the renewal of the regulated prices. In April 2023 the government announced that due to this situation, it would subsidise HEP Group in the amount of EUR 900 million.

This situation has not yet resulted in any considerable practical impacts on Croatia`s electricity production (the majority of which comes from HEP Group). Even before the Ukraine crisis, HEP Group announced its plans to expand its portfolio of PV plants. However, the targets and dynamics have not increased considerably in the last year. Due to the relatively mild 2022/2023 winter, natural gas consumption has generally decreased.

There were no major problems with supply, while due to the very good hydrology in the same period (that is, since HEP Group produces most of its electricity from hydropower plants, the favourable hydrology has considerably increased electricity production), the overall impacts of the Ukraine crisis on Croatia have been relatively mild.

Future projects

The Croatian government has announced its decision to increase the capacity of the LNG terminal on Krk from 2,9 to 6,1 billion cubic meters of gas, which is twice Croatia`s current demand. Possible options include an onshore terminal with a capacity of 15 billion cubic meters of gas, with an estimated price of EUR 1,75 to 2 billion, or a floating terminal at EUR 1,2 billion, with a capacity of 9,6 cubic meters per year.

The expansion will also include the construction of the Plinacro gas pipeline between Zlobin and Bosiljevo, whereby a total investment of EUR 180 million is foreseen, of which 25 million must be invested in the LNG terminal itself and 155 million for the new Zlobin – Bosiljevo gas pipeline. The construction of the gas pipeline will enable the increase of gas transport from the LNG terminal to its current technical capacity of about 3,5 billion cubic meters per year. This will significantly increase the security of gas supply to consumers in Croatia, and also create a basic prerequisite for the further development of the gas pipeline system and the increase of gas transport to Slovenia and Hungary, thereby reducing their dependence on Russian gas.

The Adriatic – Ionian gas pipeline project from the Albanian city of Fieri to the Croatian city of Split, with a total length of 511 km, is again under consideration. It was initially envisioned in 2012 when the Croatian natural gas transport company Plinacro and the Ministry of Economy began to participate in meetings of interested countries. The implementation was not started as planned because gas from Russia was cheaper, and the amount of gas from Azerbaijan was limited. However, recently, it was announced that the project could be reactivated.