Shell Exploration Company, a unit of super energy major, Royal Dutch Shell could sign an exploration deal with Bosnia-Herzegovina’s autonomous Muslim-Croat Federation before the end of next year, Reuters quoted Energy Minister Erdal Trhulj as saying.
Shell is to begin talks on a potential concession with government officials in late February.
“Bearing in mind the extent of the possible deal, we would be able to sign a contract awarding the concession to Shell at the end of 2014,” Trhulj said. “This is an enormous endeavour that has never before been conducted in Bosnia.”
The investment is set to range between $300 million and $700 million depending on the number of drilling sites, he said.
The federation government approached Shell in 2011 after deciding to revive oil and gas exploration plans based on the pre-war research.
A two-year preliminary deal signed in November 2011 tasked Shell with developing a data room.
In September, Shell expressed interest to get a concession in three areas containing possible deposits, but the government agreed only to a concession in the Dinaridi area, stretching from the town of Bihac in the west to the Adriatic town of Neum in the south.
Experts say that southern deposits, located at a depth of between 4000 metres and 8,000 metres, could contain up to around 3.5 billion barrels of oil reserves, while northern beds are estimated at around 490 million barrels.