Exploration and production
Which are the major projects within the area of oil and gas exploration and production in Croatia?
Being one of Croatia’s major investors, INA continues exploration activities on its concessions. Numerous potential opportunities suitable for further development program activities were recognized in Continental Croatia and significant efforts were invested in exploration activities project preparation and according to that detailed working plans for those areas. In 2016 INA has signed the onshore exploration and production sharing agreement with the Croatian Government which grants INA exploration rights for Block Drava-2. In summer 2016 the company started new gas production on fields Vučkovec and Zebanec in Međimurje and in the beginning of 2017 Vukanovec field will be put into production. In 2014 the company secured production of additional gas quantities from Croatian offshore. Through a joint operations company INAgip, INA and Eni started gas exploitation from Ika JZ field and through partnership with Edison company and joint operation company EDINA, gas exploitation from Izabela gas field started. Based on revision of all data gathered through exploration activities in Northern Adriatic future exploration activities will be planned for that area.
Which are the major projects within the oil and gas exploration and production areas abroad?
INA participates in exploration activities in Egypt from 1989 and oil production started at 1994. Exploration activities resulted with the discovery of oil fields Sidi Rahman and Rizk. INA holds interests in four development concessions in Western Desert and one exploration concession in Nile Delta of Egypt. When it comes to production, the company participates in four concession. At the end of 2012 INA redeemed additional 50% shares from RWE Dea AG and became 100% operator on East Yidma concession in Western Desert. As RWE Dea Nile GmbH partner, INA entered with 50% share exploration area of concession Disouq.
In Angola INA participates in exploration activities and oil production on offshore Block 3 since 1980. INA and partners 2005 accepted national operator offer to continue production on Block 3 and to continue exploration activities at the rest of that block. In Angola INA participates in development and production on three concessions.
In Syria INA participated in exploration and production activities on Aphamia and Hayan blocks with peak production in 2011. In compliance with the Croatian Government Decision concerning restrictive measures against the Syrian Arab Republic INA announced force majeure in February 2012 and temporarily suspended all business activities in Syria until further notice, i.e. until the „force majeure“ circumstances cease to exist.
INA is present abroad also via its subsidiary companies, the members of INA Group.
What is EOR project?
In the world oil business practice the mitigation of the natural decline effect in the production of oil and gas is more prevalent as well as revitalization of an old and partially depleted reservoirs. A method that has the largest application is the injection of carbon dioxide into oil reservoirs. INA’s EOR project will be the first case of the application of tertiary methods in Croatia. It is one of the INA’s most important investment projects in the continental Croatia. The project objective is the extraction of additional hydrocarbon on the Žutica and Ivanić oil field.
The project has also an environmental dimension, as it imprinted significant amounts of CO2 into the underground thus reducing emissions into the air. Planned project envisages the construction of system of gas pipelines, power line and signal cables for underground injection of CO2 in the soil layers on the existing production wells. Within the project, apart from the existing 85 kilometers long pipeline from the INA Molve fields to the Ivanić and Žutica INA’s fields, another 56 kilometers of new pipeline as well as two compressor stations will be built. Contracts for the EOR project were signed in May 2012.
By obtaining the permit from the Ministry of Economy, in October 2014 one-year test work began. In that period oil reservoirs of Ivanić exploitation field were injected with over 110 million m3 of CO2. At this moment first additional quantities of oil and gas are registered, but all positive effects are being determined through a monitoring program. In September 2015 requisites for filing the request for test exploitation of pipeline system on Žutica north exploitation field were met. Preparatory mining works on wells for injecting CO2 into reservoirs of Žutica south exploitation field are ongoing and the begining of injecting CO2 as second phase of EOR project is expected in 2017.
INA invested more than HRK 500 million until 2015 and further investments are predicted until 2022. Through 24 years that this method will be applied on mentioned exploitation fields it is planned to produce additional 3.4 million tons of oil and 500 million cubic meters of gas by EOR project.
How many refineries does INA have, and where are they located?
INA has got two fuel refineries located in Rijeka (Urinj) and Sisak. The Rijeka Refinery is located at the coast and has port access for deep draught ships and access to the Janaf pipeline system.
How much has INA invested in the development of the refineries, and what was the result of these investments?
More than HRK 5 billion was invested in the development of INA’s refining system in several recent years. Three facilities were built at the Rijeka Refinery as a part of the Hydrocracking Complex: Mild Hydrocracking, Hydrogen Unit and Desulphurization Plant (so-called Claus), plus numerous supporting facilities and installations, which have been in commercial operation since May 2011. Three facilities were also built at the Sisak Oil Refinery: the Desulphurization Plant, the FCC Gasoline Hydrodesulphurization Plant, and the Isomerisation Plant. The modernisation resulted in environmental competitiveness – reduction of emissions of substances that impact the environment, increased profitability of refining, and the ability of INA’s refineries to produce EURO V quality fuels meeting the highest European standards.
What guarantees the quality of INA’s refining products?
The operations of INA’s refineries conform to the international standards of ISO 9001:2008 quality management systems (as a part of INA d.d.’s certificate), ISO 14001:2004 environmental protection management system standards, and OHSAS 18001:2007 health and safety management system standards, as confirmed by corresponding certificates. The quality of INA’s products is controlled using modern testing methods at the refinery laboratories as per the accreditation according to the standard HRN EN ISO/IEC 17025. The accreditation certificate is issued by the Croatian Accreditation Agency.
What is the Rijeka Oil Refinery producing?
The production programme of the Rijeka Oil Refinery includes liquefied petroleum gas, virgin naphtha, motor gasoline, petroleum, kerosene, diesel fuels, fuel oils, bunkers and liquid sulphur. Production according the customer’s special specifications is also possible and is subject to special agreements.
Which lubricants is INA producing?
INA’s production assortment of oils and lubricants includes several hundred types and formulations of products, which were designed in research laboratories, and which represent a response to the demands of the market and consumers. Detailed information about INA’s production programme of oils and lubricants are available on the website of the production company INA MAZIVA d.o.o., which is a member of the INA Group: http://www.ina-maziva.hr/hr/.
What does the offer at INA retail shops consist of?
INA continuously develops its retail network through capital investments into its retail stations and into improvement of service quality. Besides sale of motor fuels, at INA’s retail stations customers can also choose something from a wide spectrum of consumer goods. INA stations also provide additional services tailored to the demands and needs of customers.
In summer 2015 the offer was expanded with a new groceries program, enabling customers to buy groceries quickly and at an affordable price at any moment, and in 2016 at most retail stations along motorways a new concept was introduced – Fresh Corner, which will be expanded in the upcoming period to selected city locations as well. In the unique atmosphere of Fresh Corner customers can choose among several kinds of rich freshly prepared sandwiches and freshly baked products, as well as excellent flavoured coffee, premium tea and other high quality products.
INA retail stations offer additional services adapted to customers’ needs: carwash services, bars and restaurants and the offer is regularly updated. Also, INA implements loyalty programs, giving customers the opportunity to purchase high-quality products at convenient prices.
What is Blue concept project?
At the end of 2010 INA started Blue concept project for retail network modernization which, along with new visual identity, includes measuring devices, excellent technical equipment, extended consumer goods assortment and even better service level.
The objective of this intensive retail modernization project is increasing recognizabilty and functionality of petrol stations in order to reach a high level of customer service and satisfaction. The reconstructed and modernized petrol stations, in addition to their new appearance, have a wider offer of fuels and FMCG, higher service level and better technical equippment, which makes them more attractive and more pleasant to shop in.
The modernization project is being implemented as planned, by the end of 2015 203 projects were completed. Customers’ feedback is very positive, making INA’s retail network the largest modernized network in Croatia.
What is Entrepreneurs’ model?
In this operational model the company retains ownership of all retail assets including concessions, properties, buildings, infrastructure and goods, and the entrepreneur manages those resources, as well as its petrol station team for a fee according to agreement made with INA. This is usual model in oil industry that many oil companies in the world apply for decades and it has positive impact on retail network management quality and increases its competiveness.
The project was started with a goal of giving an opportunity to potential entrepreneurs to build their own company, with strong INA’s support and sharing INA’s success. We believe that this gives significant boost to development of local entrepreneurship, improves service quality for customers and improves offer that can be adjusted to specific local needs. INA will assist the selected candidates in setting up of their own company and organization of successful business. With INA’s support, entrepreneurs are expected to take over the management of the filling stations, which will remain owned by INA and operated under INA’s brand. During the selection of future partners, priority will be given to applicants with experience in retail and to the ones with knowledge of INA’s system.
Does the oil barrel price affect the retail price of oil derivatives?
The oil barrel price on the global market is not taken as a parameter for setting retail prices on the Croatian market, but instead, average price of derivatives on the Mediterranean market is taken. However, the immediately trends of oil prices affects the trends of oil derivatives prices and thus the prices on the Mediterranean market.
How is LPG price formulated?
Sukladno Zakonu o tržištu nafte i naftnih derivata, NN 19 od 12.02.2014.g u Hrvatskoj je na snazi slobodno formiranje cijene UNP.
What is liquefied petroleum gas (LPG) and where is it used?
The mixture of liquefied petroleum gas for commercial use is without color, taste or odor in its original form. In order for the gas to be recognizable through odor, compounds with specific odor are added. Purified propane and purified butane are an exception and are delivered in its original form.
It is not toxic, but in the case of high concentration, it reduces the levels of oxygen in the room. For easier use and transport, it is liquefied under increased pressure and placed in special vessels (bottles or containers). LPG is more and more used for different purposes, from households and industry to cars as a replacement and low-cost fuel. As an energy-generating product, LPG has outstanding ecological properties. Through direct combustion, without smoke, ash, tar or unpleasant odor and the absence of sulphur compounds, LPG contributes to reducing emission of harmful gas, primarily CO2 and NOx, thus contributing to preservation of environment and mitigating harmful consequences of climate changes, as well as reducing acid rains.
What are INA's financial results for the year 2014?
INA Group’s EBITDA in 2015, excl. special items, increased by 10% in relation to the same period last year, reaching HRK 2,952 million, while the CCSEBITDA, excl. special items, amounted to HRK 3,669 million, 9% above the level in 2014. Net profit, excl. special items, amounted to HRK 58 million. Total investments reached HRK 1,650 million, which is stable having in mind the overall deteriorated environment.
Given the low oil prices, INA’s result in 2015 stayed stable compared to the previous year, which is a positive achievement for an Upstream oriented company. Halving Brent prices weighted on the result, but this was offset by weakening of HRK against the USD, a more supportive Downstream environment and increasing hydrocarbon production. Net debt remained stable at HRK 3,032 million and gearing amounted to slightly higher but nevertheless very safe 22.3%.
Net profit of the Company excl. special items amounted to HRK 58 million, while net loss, although lower than in 2014, amounted to HRK (1,418) million, impacted by the special items in the total amount of HRK 1,476 million. The major part of these one offs relates to the asset impairments in the Upstream segment, driven by the deteriorated oil price and ongoing Syrian crisis. The further impairment of assets in Syria which affected the final result was necessary and unavoidable due to the political and safety situation in the country, but it is important to highlight that it is just an accounting adjustment with no cash effect.The costs of impairment, however, are an expenditure that is not tax deductible in accordance with the Profit Tax Act. The Company has kept a smaller part of its assets in case geopolitical circumstances change and enable the return to Syria.
In the Exploration & Production segment, constant efforts in well workovers and production optimization, as well as new fields going into production, resulted in reversing the natural decline trend from previous years: overall production volumes registered an increase of 6%, with domestic crude oil production increase by 20%. Operating profit of the segment stayed positive and amounted to HRK 372 million, in spite of the HRK 1,004 million effect of the special items, most significant being the impairments of the assets. Exploration and Production segment’s CAPEX in 2015 amounted to HRK 840 million. Capital investments in Croatia amounted to HRK 678 million and capital investments abroad HRK 162 million.
Downstream CCS EBITDA excl. special items turned positive for the first time in more than five years and amounted to HRK 307 million, while EBITDA amounted to HRK (575) million, a considerable improvement over 2014 levels. Among other measures, change in INA’s Retail operating model is definitively a strong move forward with the aim of ensuring INA a more competitive position. Total capital expenditures amounted to HRK 613 million in 2015, HRK 138 million higher compared to 2014. Refining and Marketing capital expenditures amounted to HRK 451 million and mainly related to logistics projects, while Retail segment expenditures reached HRK 161 million, HRK 5 million more than in 2014.
Key achievements in 2015:
Key achievements in 2015:
- INA Group’s CCS EBITDA, excl. special items, amounted to HRK 3,669 million, 9% above the level in 2014, while net profit, excl. special items, amounted to HRK 58 million
- Continued trend of growth of domestic crude production:increase of 20% compared to 2014
- Stable financial position of the Company
- Total CAPEX amounted to HRK 1,650 million, out of which 84% invested in Croatia
- Refinery production increased by 13% and refined product sales by 10%
INA’s investments in 2015
Total investments in 2015 reached HRK 1,650 million, which is stable having in mind the overall deteriorated environment, enabling INA Group to maintain the position of one of the biggest investors in Croatia.
The largest part of investments pertains to Exploration and Production; the segment’s CAPEX in 2015 amounted to HRK 840 million. Capital investments in Croatia amounted to HRK 678 million and capital investments abroad HRK 162 million.
Total capital expenditures of Refineries and Marketing (including Retail) in 2015 amounted to HRK 613 million in 2015, HRK 138 million higher compared to 2014. Refining and Marketing capital expenditures amounted to HRK 451 million and were mainly related to logistics projects, while Retail segment expenditures reached HRK 161 million, HRK 5 million more than in 2014. In 2015, Retail segment in Croatia and Bosnia and Herzegovina completed six knock-down-rebuild projects, three modernization projects, five tank replacement projects and other minor modernization projects. Additional modernizations and improvements such as new „Fresh corner“ nonfuel concept have been approved.
How is INA’s social responsibility sustained within the community in which it conducts business?
INA’s way of conducting business is concentrated on creating benefits for the local communities and the society as a whole. Moreover we strive to develop a good collaboration with our stakeholders. We have developed a tradition of infrastructure financing for decades, particularly in the areas where INA has conducted oil and gas exploration and production. Building of schools, hospitals, health care institutions and resorts has been financed. INA helps communities in humanitarian, cultural, educational, sports, environmental, health care and scientific projects by donations and sponsorships and invests in a range of non-profitable activities valuable in terms of the overall quality of life.
In business a great deal of attention is devoted to health and safety protection, environmental protection as well as law and customs compliance within our business areas. The guidelines comprising our approach to work, towards our business co-workers and partners are defined in the Code of Business Conduct and Ethics.
INA, d.d. is a member of the United Nations Global Compact, the largest framework encouraging businesses to adopt corporate social responsibility. By implementing the Ten Principles of the Global Compact, INA supports and promotes in its operation the basic social values from the areas of human rights, labour rights, environmental protection and anti-corruption. We regularly annually inform our stakeholders about our progress within the area of social responsibility and we are also part of the global network communication Communication on Progress.
How does INA choose the projects to support?
When choosing projects which it will sponsor or to which it will contribute by donations INA, d.d. is primarily guided by the criteria of the project’s high level of benefit for the wider community and the society needs. We seek out to offer help and support to both children and young people, individuals with special needs, scientific, innovative and cultural projects, projects that contribute to health and environmental protection and development, sports professionals and non-professionals alike as well as projects important for the local communities within which INA operates.
What kind of employees does INA seek?
Considering the size and complexity of the company and the broad range of our activities, we need employees of different professions and education. We are aware that every successful company story is based on work, entrepreneurship and creativity of the employees. The point of investment is not only to invest into technologies and innovations, but also into competence development systems which will create the environment in which every individual would have the opportunity to show his or her talents, skills and ideas.
From its employees, INA requires maximum commitment, taking initiative and risks, adjusting to changes, decision-making, cooperation and teamwork, quick information exchange, trustworthiness, respecting consumers, suppliers and colleagues, assuming responsibility and participating in joint actions, monitoring performance…
Our managers’ most important duty is to facilitate maximum development and use of human potential as the principal resource and source of INA’s competitive advantage.
Within its business activities, INA pays particular attention to education and professional training of its employees at all levels. To this end, it cooperates with educational institutions which meet the highest standards, and hires and develops an increasing number of internal educators who, owing to their experience, knowledge of the organization and competences, deliver high-quality, structured trainings.
Where are vacancy announcements for jobs at the INA Group available?
All open vacancy announcements are available here, and you are welcome to address any inquiries about job opportunities at INA and the INA Group to firstname.lastname@example.org.
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