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INA to resume operations at Sisak refinery in April

Deals

Croatia's oil and gas company INA is expected to resume refining operations at its plant in Sisak from April, Croatian Economy Minister Ivan Vrdoljak said yesterday. INA reported last month that it had to halt production in Sisak, one of its two refineries in Croatia, due to "depletion of the local crude stock".

"According to the information we have, the storage facilities in Sisak will be restored in April, when we expect a restart of production," Reuters quoted Vrdoljak as saying. INA was not available for immediate comment. The destiny of the Sisak refinery is a contentious issue between co-owners of INA, Hungary's MOL oil and gas firm and the Croatian government.

Zagreb wants to preserve production and jobs in Sisak and at INA's other refinery in Rijeka, but MOL questions having two sites, both in need of an overhaul, so close to each other. MOL also owns refineries in Hungary and Slovakia.

INA has recently indicated that exporting Croatian crude for refining abroad could be an option, which has raised eyebrows in Zagreb. "There is no economic, ecological or transport justification for exports of domestic crude when we have refining capacity at home," Vrdoljak said.

Croatia produces some 20% of the oil its consumes. MOL and the Zagreb government have been wrestling for control of Croatia's biggest utility for three years. Talks that started in September 2013 have made little progress.

A new round is tentatively set for March. Earlier, MOL has said it is prepared to sell its INA stake if no deal is reached. Croatia, which owns 44.84 percent of Zagreb-based INA, has tried since 2011 to regain some management rights in INA that MOL got as part of a 2009 shareholders agreement, which has given it a 49.08% stake in INA.

The three-year clash over the Croatian company has included mutual arbitration suits over management rights and the Croatian government's alleged breaches of contract, a Croatian Supreme Court bribery verdict against Croatia's former premier Ivo Sanader for his role in INA's sale, and charges of bribery in a Croatian court against MOL Chairman Zsolt Hernádi, which he denies.

In the latest development, the Croatian economy ministry on Tuesday revoked INA’s exploration license for the second time, after a first revocation was nullified by a court in January. Since November, this was the third license to be withdrawn, all for explorations in northern Croatia. A week ago INA posted net profit excluding special items of HRK 344 mln ($60 mln) for 2014, a 64% drop from the previous year.

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