PEOP Shareholders Agreement to be signed next week

17.04.2008. 12:51

Zagreb – One of the following activities on the PEOP (Pan European Oil Pipeline) Project implementation will be the next week signing of the Shareholders Agreement that will take place in Bucharest on Tuesday, 22 April 2008. So far, the signatories to the Shareholders Agreement shall be the representatives of JANAF from Croatia, CONPET and OIL TERMINAL from Romania, as well as of TRANSNAFTA from Serbia. On behalf of JANAF, the Agreement shall be signed by Mr. Vladimir Vranković, Board Member.

The Agreement is based on the Ministerial Declaration from April 2007, the conclusions of the PEOP Interstate Committee and the EU support. The Croatian Government by its Conclusion of 19 March 2008 supported JANAF Plc. to participate, as shareholder, in the establishment and operation of the PEOP Project Development Company.

Upon signing the Agreement, within 45 working days, a company shall be established, whose task is primarily to promote the PEOP Project and to attract the investors and companies, which will transport their crude oil from the Caspian region, as well as the oil consumers. Then, all relevant relations will be agreed upon, the necessary documentation will be prepared and the construction of the PEOP pipeline will be initiated. Until now, this has been the most significant step in the project preparation, since the care and responsibility for the PEOP development will, from now on, be entrusted to the relevant interested companies.

Slovenian and Italian companies, being the signatories to the Ministerial Declaration, may under the same conditions as the above mentioned companies, sign the Agreement, subscribe the shares and participate in the management and operation of the PEOP Project Development Company, but only until the Investors Conference, which should be held one year after the incorporation of the Company.

“Therefore, at the moment, there are no strong business relations with potential ‘major’ PEOP investors, nor with the oil producers. The potential interest exists, since the crude oil production has been increasing in the Caspian region, seeking for its competitive routes to the European consumers. One of those competitive routes is PEOP,” stressed Mr. Ante Markov, Chairman of the JANAF Management Board.

According to Mr. Markov, Chairman of the Board, PEOP is “an environmentally friendly pipeline”, which would reduce the tanker traffic both in the Mediterranean and in the Adriatic for approx. 50 mil. tons annually, since the crude oil will be directly transported from Constanta on the Black Sea to the European refineries.

As agreed in the Ministerial Declaration, the Company shall especially take account of the environmental protection and application of the EU legislation, as well as of the state-of-the-art technical, technological and safety solutions when constructing and using the pipeline and that there will be no increase in the Adriatic tanker traffic.

“The implementation of the PEOP Project shall mean better utilization of the existing JANAF pipeline system, greater number of users, significantly higher crude oil transport, growth of revenues and profit, as well as the company’s value, that is new development of JANAF and more intensive integration into the European oil pipelines network. It will also be of considerable benefit to the Republic of Croatia, civil engineering companies and those involved in the equipment manufacturing, as well as to other companies both during the pipeline construction and its operation. A special benefit will be seen in the enhancement of the security of crude oil supply to local consumers and the EU and Southeast European consumers, as well as in the increase in economic benefits both for the state and local communities and enhancement of Croatian geostrategic significance,” stated Mr. Markov.