It was an honor to chair the 6th Balkans Petroleum Summit in Bucharest, Romania. The Summit brought together key government and industry decision makers who are leading oil and gas exploration and production in Southeast Europe, particularly offshore. During the second day of the event, I presented my presentation, ‘Southeast Europe: Opportunities Beckon’. In addition to outlining regional opportunities and upcoming license rounds, I addressed investor roadblocks with a particular focus on ENGOs as well as why they are successful in the region and how to restore balance.

1. October 17th, 2018
SOUTHEAST EUROPE –
OPPORTUNITIES BECKON
GEORGE KOVACIC
kovacic@croscorp.com
6th Balkans Petroleum Summit
Bucharest, Romania

2. DISCLAIMER
All parties attending this presentation agree that Croscorp International Ltd. (Croscorp) is not
providing any service to any of the parties present with this presentation. The information and
examples provided are solely for illustration purposes only, Croscorp assumes no responsibility
or liability whatsoever for any action taken by any party. For avoidance of any doubt, all
parties shall be solely responsible for all decisions undertaken and all parties are encouraged
to conduct their own due diligence prior to undertaking any decisions or contact Croscorp or
another party for a consultation and professional expertise. Regulations and developments in
Southeast Europe can be very complex, vary substantially between jurisdictions and can
change on a regular basis. Information and examples provided here within are done to serve as
an example and may or may not still be applicable or valid today or in the near future.

3. 3
Croscorp International
Focus Areas: Southeast Europe and Canada
Clients: Oil Companies (IOCs); Drilling, Seismic and Oilfield Service Contractors;
Consulting Companies/Investment Banks; Government Ministries/Agencies
SERVICES OFFERED:
• Market entry and license round bidding
• Partnership/bid group facilitation
• A&D/deal facilitation/negotiations
• Permit and E&P license obtainment
• Above ground risk minimization
• Establishing pre-conditions to attract IOC
investment and launch of license rounds
• Government and Stakeholder Relations

4. 4
Investor Roadblocks - ENGOs
VANCOUVER, CANADA
November, 2013
Photo from Vancouver Sun, November 3, 2013
ZAGREB, CROATIA
December, 2013
Photo from tportal.hr, December 10, 2013
ENGO strategies and performances are the same globally

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Investor Roadblocks - ENGOs
ENGOs
• Special Interest Groups
• Fallacies
• Spread Fear
• Celebrities
• Global
Flourish when a
Government
is weak
Government/IOCs
• Voters/Shareholders
• Facts
• Growth/Profit
• Scientists
• Local/Global
Flourish when a
Government
makes decisions
VS
ENGOs disrupt E&P

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Investor Roadblocks - ENGOs
Why are ENGOs successful in Southeast Europe?
• Small markets with diverse fiscal/regulative regimes
• Countries at odds
• Corruption/nepotism which breeds paranoia
• Unestablished systems
• Lack of strong domestic oil industries
Geology knows no borders, ENGOs flourish when borders exist.

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Restoring Balance
Facilitate E&P in Southeast Europe:
• Cooperation amongst IOCs - bid groups/partnerships.
• Cooperation among countries - regulations, license rounds.
• Universities, diplomatic core and other stakeholders.
• Advocacy, information and education.
• Balkans Petroleum Summits and other events.
IOCs and Drilling and Oilfield services contractors target the region and not individual
countries.

8. 8
Restoring Balance
Facilitate E&P in Southeast Europe:
• Benchmark fiscal and legal regimes
• Stabilization provision
• Legacy data accessibility
• Multi-client seismic
• Meet schedules/goals - Ensure rule of law
• Make difficult decisions - “No” is better than no answer
Impossible to change anything below ground however easy to reduce above ground risk

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.
• Preconditions established for successful license rounds
• Highly underexplored/potential for substantial discoveries
• Better opportunities than neighbors – inexpensive acreage
• Low hanging fruit
• Good infrastructure/local demand
• License rounds upcoming and acreage available
Southeast Europe
The Time is Now!

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• What to Expect:
– Updated fiscal and regulatory
regimes.
– Upcoming onshore and offshore
license rounds.
• OPPORTUNITY ALERT:
- IOCs looking for partners
- Farm-in opportunitiesMap from Albpetrol presentation – Athens, October, 2017
Albania – Market Update

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.
Map from: Public Procurement Documentation: 76200000-5- March, 2018
• What to expect:
– Establishment of pre-conditions for
1st license round
– Upcoming onshore license round
• OPPORTUNITY ALERT:
- IOCs looking for partners
Bosnia and Herzegovina
– Market Update - FBiH

12. 12
.
Map from: NIS Gazprom Neft Teaser
• What to expect:
– Partnerships with Jadran
Naftagas, hold all acreage
until 2039.
• OPPORTUNITY ALERT:
- Farm-in opportunities
Bosnia and Herzegovina
– Market Update - RS

13. 13
Adapted maps from AZU presentation – Balatonfured, October, 2016
• What to expect:
– Onshore license round – 7
Pannonian blocks
– Onshore license round – 4
Dinaride blocks
– Offshore – Open Door
• OPPORTUNITY ALERT:
- IOCs looking for partners
- Farm-in opportunities
6 blocks
Pannonian Basin
4 blocks
Dinarides
Croatia – Market Update
7th Pannonian block

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• What to expect:
- Expressions of interest for
available onshore and offshore
acreage
• OPPORTUNITY ALERT:
- IOCs looking for partners
- Farm-in opportunities
Greece – Market Update
Adapted Map from HHRM presentation – Athens, October, 2017

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.
Adapted map from MHA presentation – Athens, October, 2017
• What to expect:
– 2nd offshore license round
– No plans yet for an onshore
license round
• OPPORTUNITY ALERT:
- IOCs looking for partners
Montenegro – Market Update
Prospects

16. • Cooperation
• Partnerships
Above Ground Support: Technical support:
George Kovacic
16
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Southeast Europe
How to Succeed?