Croatia wants influence in INA's upstream segment in MOL row

Mon May 12, 2014 9:21am EDT
 
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ZAGREB (Reuters) - Croatia wants a bigger say in the upstream division of its leading energy firm INA (INA.ZA: Quote) amid figures showing a sharp fall in investment, Economy Minister Ivan Vrdoljak said on Monday, fuelling the country's spat with joint owner MOL.

Relations between Croatia and Hungarian oil and gas group MOL MOLB.BU have been strained in recent years with Zagreb accusing MOL of failing to make agreed investments, and MOL complaining about red tape and the government's failure take over INA's loss-making gas trading business as promised.

Croatia controls close to 45 percent of INA, while MOL owns almost a 50 percent stake.

"The investments in INA fell from 4.4 billion kuna ($798 million) in 2009 to 974 million kuna in 2012. In the last five years INA's business was harmed and I reproach our colleagues in MOL for declining to talk about corporate management in INA", Vrdoljak said.

He said that Croatia was determined to participate in decision-making in INA, notably in its upstream segment.

MOL said Vrdoljak's comments were a tactical move to deflect attention from bad regulation that had caused significant financial damage to INA.

In an emailed statement to Reuters, a MOL Group spokesperson also said the authors of the study cited by the minister "can hardly be regarded independent or without partial interest."

"...the Minister found it necessary to share specific details of the study with the public without any expert oversight and consultation - although without being familiar with the study MOL's Negotiation Team immediately indicated the absurdity of certain cited figures and their inconsistency," MOL added.

A Croatian court sentenced former prime minister Ivo Sanader to 10 years in prison for allegedly taking bribe from MOL in 2008 for allowing it a dominant position in INA. Sanader and MOL deny the charge and the Croatian Supreme Court is now considering Sanader's appeal.   Continued...

 
Croatia's Economy Minister Ivan Vrdoljak looks on during an interview with Reuters in Zagreb, February 22, 2013. REUTERS/Antonio Bronic