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Economist: Exploration and production drive INA revenues

Deals

Exploration and production are the main revenue drivers for INA, and investments must be channeled into to most lucrative businesses, the chief economist of INA, the Croatian peer and subsidiary of Hungary's MOL oil company told Croatian public service radio yesterday, after a new controversy emerged over the weekend regarding MOL's intentions in Croatia. 

Goran Saravanja did not comment on press reports over the weekend that INA wanted to close down one of its two refineries in Croatia because of losses and slack in Western European markets, saying that there was still no decision on the matter.

Croatian press reports suggested the Croatian government was all but convinced that INA wanted to close down the refinery in Sisak, prompting Croatia's economy minister to accuse MOL of harmful intentions against his country. An official statement from INA said the firm was reviewing its refinery business and all options were open. Saravanja, however, confirmed that the Sisak refinery was bleeding money to the tune of HRK 1.25 bln last year – which was an overall profitable one for the company. He also said INA's refinery business lost HRK 800 mln in the first half of this year.

US oil products are conquering markets in Europe based on new technologies developed by US companies, and that diminished demand for products from Sisak, the chief economist said. "We are in the process of reviewing all elements of our businesses, and want to focus on the most profitable sectors. Financial data already shows that exploration and production are the main revenue sources," Saravanja said.

He added that lately some "illogical arguments" were aired that INA's business interests were intentionally harmed by private investors, including MOL. Saravanja said that INA has completed investments of HRK 665 mln so far this year, on top of HRK 2 bln over the previous two years. INA has a "very important role" in the MOL group of companies in the field of exploration and production, and it also highly appreciates its experts working in Croatia, Saravanja said.

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