FBiH Government to Continue Implementation of Oil and Gas Exploration Project in the Federation

The FBiH Government today discussed activities related to the implementation of the Oil and Gas Exploration Project in the Federation of BiH, reports the Patria news agency.

In November 2011, the FBiH Government signed a Memorandum of Understanding with the oil company Shell Exploration Company B.V. - with its registered seat in The Hague (Kingdom of the Netherlands), for a period of 24 months. The Memorandum stipulated that, based on existing written documentation on conducted exploration works, Shell Exploration Company B.V. would, at its own expense, digitize geological and geophysical data, create an initial geological and geophysical screen of the data, and perform a structural reconstruction of the tectonic belt using modern tools, technology, and testing, in order to obtain basic data for assessing the prospectivity of deposits in the Federation of Bosnia and Herzegovina.

Based on available data, analyses, and expert interpretation of results obtained from earlier research, the oil company Shell Exploration Company B.V. prepared the "Prospectivity Assessment of the Federation of BiH for Oil and Gas Exploration," which it submitted to the Government of the Federation of BiH in 2013.

Shell Exploration Company expressed interest in extending the Memorandum of Understanding in order to negotiate with the Government of the Federation of BiH for obtaining a concession for oil and gas exploration and exploitation in the territory of the Federation of BiH. The Memorandum was extended in 2013 and 2014, with a duration until November 2015.

On September 22, 2015, the oil company Shell Exploration Company submitted a notification that they did not wish to use the possibility of extending the Memorandum of Understanding due to a revision and analysis of their internal portfolio, influenced by the current state of the oil and gas market. The decision was made primarily based on their global portfolio assessment, and not on an assessment of the prospectivity of the Federation of BiH area.

In the submitted explanation, it was stated that the Government of the Federation of BiH may use the submitted report on the prospectivity assessment of the Federation of BiH area for its own needs, and that Shell Exploration Company would adhere to the confidentiality obligations set forth in the Memorandum of Understanding. Also, in the explanation, Shell Exploration Company thanked the cooperative approach, contribution, and expertise of the participants in the project from the Federal Ministry of Energy, Mining and Industry and the Federal Institute for Geology, who helped prepare the prospectivity assessment and report on the geology of the Federation of BiH, which contributed to a better picture of the business environment in the Federation of BiH.

The Government of the Federation of BiH will continue the implementation of the Oil and Gas Exploration Project in the Federation of BiH.