Previous government, contrary to the law, approved the extension of the deadline for the completion of the exploration to the consortium of offshore companies Eni Montenegro and Novatek Montenegro from the Netherlands, although it could have collected a guarantee of up to 85 million euros on that basis. 
The concession agreement for the production of hydrocarbons with ENI/Novatek was signed by the Government on September 14, 2016. It stipulates that the initial oil and gas exploration lasts four years, during which time they are to collect 3D seismic data, complete geophysical and geological studies, as well as complete two exploratory wells (Article 9, item 2 of the Agreement).
In case the concessionaires do not fulfil these obligations, the Agreement stipulates that they will be obliged to pay the Government of Montenegro up to 85 million euros from the guarantee they deposited (Article 9, item 3 of the Agreement).
Excerpt from the concession agreement
In mid-February last year, the companies Eni Montenegro and Novatek Montenegro asked the Government to extend the deadline by one year.
At the time of submitting the request, the concessionaires had only completed the first out of three items in the Mandatory Work Programme, i.e. they had collected seismic data. At that moment, the preparation of the mentioned studies was still in progress, and the exploratory drilling did not even begin.
Excerpt from the information submitted to the Government by the Ministry of Economy
On March 19, 2020, one month after the addressing of the oil companies, the Government of Duško Marković accepted their request, and instead of activating the guarantee, it allowed them to extend the deadline by one year, i.e. until September 14, 2021.
Conclusion of the Government
Accepting the explanation of Eni/Novatek, previous government referred to Article 29 of the Law on Exploration and Production of Hydrocarbons, which stipulates that the deadline may be extended provided that “the concessionaire failed to complete the obligations from the work programme due to technical problems that occurred during the Exploration phase which were unforeseen, and could not be avoided or eliminated”.
However, the reasons for the extension cited by the companies were not of technical nature, and could have been avoided or eliminated had these companies not been late, violated the law and selected unreliable subcontractors.
In the document submitted to the Government, the concessionaires stated that the technical problems consisted in the lengthy process of obtaining approval for the Environmental Impact Assessment Study, due to the withdrawal of the subcontractor the was supposed to collect seismic data, as well as the incident that took place on a boat which performed geotechnical exploration.
Excerpt from the information submitted to the Government by the Ministry of Economy
According to the documentation of the Environmental Protection Agency obtained by MANS, the prolongation in the preparation of the Study occurred because the omissions were made by the oil companies, not by the state. Concessionaires were late in initiating the procedure and submitted documentation that did not comply with the standards.
Namely, in March 2017, i.e. six months after the signing of the contract, the oil companies submitted a request to determine the scope and content of the Study. The Environmental Protection Agency issued a decision within a month and gave them the requested instructions.
Five months later, the companies submit the study, the Agency conducted a public hearing and after two months, in November 2017, it asked them to amend that document in order for it to be harmonized with Montenegrin laws. Three months later, the oil companies submitted the updated study, but it once again did not meet the legally prescribed standards, so the Agency asks for a new amendment. Only after three months, the concessionaires finally submitted the Study which the Agency accepted, and one month after the submission, it made a decision.
Excerpt from the decision of the Environmental Protection Agency
Excerpt from the decision of the Environmental Protection Agency
Excerpt from the decision of the Environmental Protection Agency
When it comes to justification of the oil companies’ request to extend the contracts because they stopped cooperating with the subcontractors they chose themselves, there is not a single reason for their choice of unreliable suppliers to be borne by the state and be treated as a technical problem.
Thus, the only technical problem pointed out by Eni/Novatek was the incident on the boat, but the Government did not determine whether it was due to a failure in the work of the companies, i.e. whether it could have been avoided.
Instead, Duško Marković’s government obediently accepted the unlawful demands of the oil companies and damaged the state budget by a multimillion amount.
After that, on May 14, 2020, Eni/Novatek requested an additional extension of the deadline for the completion of works due to the COVID crisis, which was also accepted by the Government, so the oil companies are obliged to complete the exploration wells by March 13, 2022.
09. 2016. The agreement concluded
20.3.2017 Eni submitted to the Agency a request to determine the scope and content of the study
24.4.2017 Decision on determining the scope and content of the study
14.09.2017 Request for approval of the study
14.11.2017 Requested amendments to the study
7.02.2018 Requested an extension of the deadline for submission of the study
23.02.2018 Submitted the updated study
22.03.2018 Additional information requested from Eni because it did not meet the standards
29.06.2018 The study amended once again
20.07.2018 The commission accepted the study
23.07.2018 The Agency issued a decision
