INA INCURS 1.57 BILLION KUNA OF LOSSES IN 1999

ZAGREB, May 11 (Hina) - Ina Group, Croatia's state oil company, in 1999 incurred losses amounting to 1.57 billion kuna (US$187 million) and it is estimated that in the first quarter of 2000 it incurred another 100 million kuna of losses (about US$12 million). This is a huge loss in only one business year considering that Ina completed the year before with some 116 million kuna of profit (US$13.8 million), Ina general director Tomislav Dragicevic told a news conference on Thursday commenting on Ina's annual report for 1999. Although the company refined more oil and sold more oil products than the year before, the expected effects failed. The main reason for this, according to the management, is the system of determining the prices of oil products on the domestic market, which last year covered only 70 percent of the costs of imported oil. Ina is still incurring losses due to price control, especially because the prices of crude oil on the world market are not falling in line with forecasts and the price of one barrel of brent oil is US$27 instead of the planned 20-22 dollars, the management said. The company's management sees a way out of the current situation only in the introduction of the principle of automatism in setting retail prices, that is, in following changes in prices on the world market. For the period 2000-2002 Ina does not have any capital of its own for investments and production capital. The management believes a framework for the healthy operation of the Croatian oil company and its further development, as well as a model of its privatisation should be found in Croatia's strategy of power development. Although the strategy of finding a strategic partner has still not been defined, it is certain that Ina will accept all partners who have a market, that is, who have oil production but do not have refineries. (hina) jn rml