Montenegro: A Small Country Thinks Big

Montenegro has black mountains, blue sea, green alpine meadows, awe-inspiring canyons, idyllic lakes – and untapped offshore hydrocarbon potential.
This article appeared in Vol. 9, No. 5 - 2013


The Njegoš Mausoleum on top of the Lovcen mountain is the final resting place of Petar II Petrovi-Njegoš, 19th-century ruler and poet, and considered the founder of Montenegro. Source: National Tourism Organisation of Montenegro archives The beautiful country of Montenegro is located in south-east Europe, on the Adriatic Sea. It covers an area of 13,812 km2 – about the same as the US state of Connecticut – and has a 300 km long coastline, the subject of great tourist interest. The central region consists of the most fertile land and most major industrial activities are located in this part, while the northern region is a mountainous area with significant coal reserves.

While tourism is a vital part of the economy, contributing over 10% to total GDP, the country believes that it has considerable potential in its virtually unexplored offshore waters and is planning to open the first licensing round in the near future.

100 Years of Exploration

Geology, oil and gas fields and geological provinces of south-east Europe. Although commercial deposits of oil and gas have not been found yet off Montenegro, in parts of the Adriatic Basin belonging to neighbouring countries Italy, Albania and Croatia, oil and gas have been found and commercially exploited for years. Source: U.S. Department of the Interior, Open File Report 97-470 According to the decision passed by the National Assembly and confirmed by the Montenegrin King Nikola on 18 February 1914, a Dutch industrialist from The Hague, J. Kokern, was awarded the concession for exploitation of oil in the region of Skadar Lake, in south-east Montenegro on the border with Albania. The rationale of the concession stated that oil exploitation would reduce emigration of Montenegrins, contribute to the increase of exports, improve the economic status of the state and ‘save our peasant against evident financial disaster’. Due to the beginning of the World War I, the initial works were terminated.

After WWI, interest in oil exploration reappeared, and in 1922 the Zuber brothers commenced drilling the first exploration well, also in the region of Skadar Lake. At a depth of 250m the drilling rig broke and the discovery attempt failed, never having reached the target.

Although it will soon be the 100th anniversary of the beginning of the search for oil in Montenegro, the syndrome of the ‘first well failing to reach its target’ continued many years afterwards. Over the total area of Montenegro covering 21,500 km2, including 8,500 km2 offshore, only 20 exploration wells have been drilled. Sixteen were onshore in the period from 1949 to 1966, undertaken by the government company Nafta Crne Gore, which was established for this purpose. Although in some wells traces of oil and gas were identified, the absence of modern geophysical methods together with the location of wells based only on the results of surface geology, resulted in no discoveries onshore. Soon afterwards Nafta Crne Gore was terminated, and the state discontinued financing oil and gas exploration at the end of the 1960s.

In 1973 the exploration for hydrocarbons in this territory was taken over by the government-owned Jugopetrol Kotor, which was primarily engaged in downstream activities. In cooperation with foreign oil companies, Jugopetrol Kotor acquired over 10,000 km of 2D seismic offshore and 1,250 km onshore, as well as 400 km2 of 3D seismic. Three offshore and one nearshore well were drilled between 1975 and 1991.

Range of Play Concepts

The Dinarides fold belt is separated from the Italian Apennine fold belt by the Adriatic foredeep basin, and these two fold belts almost form a mirror image of each other, as can be seen on the cross section. The far side of the Adriatic- Ionian Basin is represented by the Apulian Carbonate Platform in Italian waters. The edge of the platform trends obliquely to the modern marine basin in the Italian Apennine fold belt, where giant oil fields were discovered in thrusted Mesozoic carbonate traps, and a great variety of gas fields also occur in Tertiary reservoirs of the foredeep sequence.

In Albania the oil and gas fields occur in both Cretaceous carbonate and Tertiary clastic reservoirs of the Dinarides fold belt. The Adriatic-Ionian Basin comes ashore in Albania where it is known as the Ionian Zone. Near the coast this is overlain by the post-tectonic ‘Post Adriatic Depression’, formed of Miocene to Recent molasse. The Ionian Zone crops out in southern Albania, where seven oil fields were discovered in the carbonates, demonstrating that basinal carbonates can be effectively charged with commercial volumes of oil.

  • Schematic cross-section Apennines – Apulian Platform – Southern Adriatic Basin – Dinarides. Source: Ministry of Economy, Government of Montenegro

  • Schematic cross-section summarising the hydrocarbon play concepts in Montenegro. Source: Ministry of Economy, Government of Montenegro

In the offshore area of Montenegro prospects have been identified both within the Dinarides Thrust Belt and in the adjacent Adriatic-Ionian foreland basin.

The stratigraphy offshore Montenegro is dominated by a Mesozoic to Middle Eocene rift to passive margin sequence with up to 3.5 km of platform carbonate, shale and evaporates deposits. This sequence contains a number of source, reservoir and seal intervals, proven both in wells and from outcrop studies. Beneath the carbonates, the Lower to Middle Triassic, primarily continental sequence, includes some marine clastic intervals with combined reservoir and seal potential. The carbonates are succeeded by prospective Palaeogene (Oligocene, Eocene), Neogene (Miocene, Pliocene) and Pleistocene sequences with thick developments of turbidite shale and sandstones, deposited in the foredeep in front of and beneath the carbonate thrust structures. In offshore wells, gas-bearing sandstones and conglomerates have been found, which are thought to be involved in both stratigraphic and combination traps. Direct hydrocarbon indications are interpreted on the marine seismic data in the offshore Montenegro, with bright events, positive AVO effects and gas chimneys in several zones.

Interesting Trap Styles

Skadar Lake was the site of the first exploration for oil and gas in Montenegro, nearly 100 years ago. Source: National Tourism Organisation of Montenegro archives Thermogenic oil generation of source rocks took place from the Eocene to Late Triassic carbonates with indigenous oil and gas migrating up dip and up faults into traps at Triassic clastic and top carbonate levels. Evidence from the Apulian Platform suggests that there may be significant additional hydrocarbon source potential from within the Triassic sequence offshore.

In 1980, Amoco reported the results of an onshore reconnaissance surface sampling describing Cretaceous samples from near Podgorica in the centre of the country. Three of the four samples had TOCs averaging 15%, with high HI’s indicating an oil-prone character.

Regarding maturation, temperature data is available from wireline logging runs for wells. Relatively cool geothermal gradients predominate, ranging from around 23°C/km in the north-western offshore, to 17°C/km and 14.6°C/km further north-east. It appears that depression of the geothermal gradient has occurred due to the thermally conductive nature of the predominant carbonate lithology, structural loading beneath thrusts and rapid Neogene subsidence of the Adriatic area.

Structural trap types include hanging-wall ramp anticlines and footwall anticlines and fault traps. The Eocene and Oligocene clastic reservoirs could form both structural and stratigraphic traps with thermogenic oil and gas migration into them, while Pliocene and Pleistocene traps would most likely be charged by biogenic gas in a similar fashion to many of the Italian and Croatian foredeep basin gas fields.

Wireline data gives a good indication of Palaeogene and Neogene seal potential, with observed reservoir intervals capped and interbedded with marl and silty claystone. Miocene sequences in the wells comprise a massive claystone, thick, slightly silty in places and with Messinian anhydrite at the top providing an excellent seal potential. The carbonates reservoir zones have potential top-seal comprising Eocene or Oligocene shale.

Plenty of Potential

Data acquired offshore Montenegro includes 2D seismic (orange lines), 3D seismic (green block) and exploration wells (blue circles). Block delineation is represented by grey lines. The deepest water is 600m. Source: Ministry of Economy, Government of Montenegro Offshore Montenegro is an attractive exploration area and identified prospects span a wide range of stratigraphic units.

There is no data concerning Pleistocene reservoir quality from any of the Montenegrin wells, but there are analogues in Italy and Albania, such as the Barbara field in Italian waters in the northern Adriatic, which produces from high quality Pleistocene sands. The field has reserves of around 1.4 Tcfg, which is 99.5% methane and probably biogenic in origin. Production is from Pleistocene turbidite sands between 1,000m and 1,400m depth. The average porosity is 30%, and permeability varies from 5–100 mD, locally as high as 1 D.

Gas is produced from comparable Miocene shelfal sand facies in Albania, where the reservoir quality of Miocene shelfal sand may be more representative of the Pleistocene in Montenegro. Three oil and six gas fields have been developed in the Neogene Durres Basin, which overlies the Mesozoic Ionian zone in northern Albania. Porosities vary from 10–30% with a mean of 23%; the permeability of the Albanian Miocene shelfal sands varies from 2mD to 2 darcys, which should support significant gas production. From this it could be concluded that the reservoir quality of Miocene shelfal sands in Albania is likely to form the closest analogy to the Pleistocene reservoir in Montenegro. Data supports the suggestion of a porosity range of 15%–40% as input to reserves estimates for Pleistocene prospects with target depths of around 1,000m.

During Early Pliocene times, a prominent delta system prograded from east to west across the Montenegrin offshore. Based on seismic data, bright areas can be identified at the bottom of a prograding delta, which have been interpreted as gas-charged turbidite sands. The stratigraphy of the Pliocene was evaluated from well summary logs from offshore wells in Montenegro, Croatia and Albania.

Several Pliocene prospects have been identified at depths ranging between 700m and 1,300m in waters of 75–120m. The area of these prospects is covered by 3D seismic data and the gas indicative nature allows the exploration risk to be considered as medium to low. An exploration well on one of the features would allow the drilling results to calibrate the seismic response. Given an initial successful result, it would seem likely that most of the prospects identified here would also be successful.

Mesozoic Carbonates

Potential for oil accumulations within Mesozoic carbonates has also been identified. Both Mesozoic and Palaeogene carbonates form a primary reservoir target offshore Montenegro, with the potential to produce substantial quantities of oil and gas. The carbonate reservoir facies with the optimum primary reservoir quality is believed to lie along the shelf break separating the Dalmatian Platform and the Adriatic-Ionian Basin. Seismic data demonstrates that the carbonate reservoir is likely to be developed in shelf edge facies, regarded as a low risk reservoir, in the centre of the offshore area.

In Albania there is production from carbonate reservoirs in ten oil fields and one gas field, all in the pelagic Ionian Zone. Reservoir quality in the central Montenegrin offshore is expected to be better than for the Albanian fields, perhaps closer to those at the Aquila field on the slope of the Apulian Platform, which produces from carbonate slope and pelagic facies. The field lies close to the base of the Apulian platform palaeoslope, in a location which is essentially a mirror image of the Montenegrin side, and would correspond to down dip of the crest of identified prospects. The reservoirs are a mix of tight pelagic limestone and much coarser detrital, porous limestone, derived from the crest of the shelf.

Looking Forward

Kotor and Boka Bay. Source: National Tourism Organisation of Montenegro archives In July this year the government of Montenegro adopted the Hydrocarbon Upstream Industry Fiscal Policy, defined for the purpose of creating a sound fiscal system that implies a stable and transparent long-term tax policy, and the first bidding round is expected to be announced in the near future. At the moment Montenegro does not envisage any state participation. A data room with seismic, geological, geophysical, geochemical and other data is available.

Having been part of Yugoslavia from the end of WW1 until it dissolved in 1992, Montenegro federated with Serbia until June 2006, when after a referendum it declared independence. The economy has been slowly growing since then, although affected by the global financial crisis. It is, however, heavily dependent on tourism and refined aluminium, and imports all its energy needs, so the exploitation of hydrocarbon reserves could be an important factor in its development.

Luckily for Montenegro, it would appear as though there is plenty of potential in their almost completely unexplored offshore waters.


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