Croatia: 187 million euros from hydrocarbons concessions in the last 3 years

, SEE Energy News

From the 58 oil and gas fields, on which concessions were given to INA and other companies, the Croatian state earned only 187 million euros in the last three years, show the data from the most recent State Audit report for 2013, 2014 and 2015, drawing attention to low fees paid by hydrocarbons concessionaires.

According to the report, the National Audit Office believes that the current fee on the extracted volumes of hydrocarbons, which amounts to 10 % of the market value, is too low given the significant quantities of oil and gas exploited in Croatia and the fact that hydrocarbons are non-renewable resources. For comparison, similar fee in Slovenia or Greece amounts to 20 % of the market value, while in Albania taxes on earnings from hydrocarbons exploitation go up to 50 %.

Very interesting, given the current dispute between the Croatian state and Hungarian MOL over INA, is the fact that concession fees for hydrocarbons exploitation amount to 12 % in Hungary, plus a special tax of 17 % on earnings from extracted hydrocarbons. In Croatia, there is no special tax on earnings from concessions, but there is an annual income tax of 20 %, which relates to overall business, rather than just to the proceeds from the exploitation of oil and gas.

Since fees in Croatia amount to 10 % of the market value of extracted hydrocarbons, it turns out that concessionaires had revenues of around 629 million euros in just one year. If the state, for example, introduces a fee of 20 % like in Greece and Slovenia, it could earn almost 130 million euros per year, even without a special tax on extracted hydrocarbons.