Despite almost negligible oil reserves from a global point of view, firms continue to explore the region for oil deposits. For example, in the Czech Republic, exploration has been taking place in the Western Carpathians, an area bordering Austria and Slovakia. Australias Carpathian Resources, which is leading the exploration and production activities in this regioo, reported that it has been producing oil, albeit sporadic due to water influx and weather problems, from two wells (Ks7 and Ks8) at the Krasna oil field. Carpathian Resources also holds three exploration licenses in Slovakia for the Koroa, Mikova and Kezmarok fields, of which the first two have demonstrated non-commercially-viable oil deposits after preliminary testing. According to a Slovak government sponsored study (1993-1996), the Kezmarok field was deemed the deposit with the greatest potential, containing 31 million barrels of oil and 420 Bcf of natural gas. It is unclear how much of these reserves might be recoverable. According to its three-year (2003-2005) strategic plan, the Hungarian Oil and Gas Company (MOL), aims to double its oil exploration and extraction, investing $40-$50 million annually on exploration activities in Hungary. In 2003, Mol reported that it had increased its crude oil production in Hungary 8 percent yeas-on-year. Internationally, MOL had been involved in a joint-venture with Russias Yukos to explore and develop the 145-million-barrel Zapadno-Malobaik oil field in Western Siberia, with each owning 50 percent. However, in September 2005, MOL took OAO Russneft as their new partner, replacing Yukos. This replacement was approved by the Federal Antimonopoly Service of the Russian Federation, with all the contractual provisions of the joint venture remaining unchanged. At the end of 2004, it was estimated that MOLs share of the net proven reserwes is 28.1 million barrels. MOL believes that full exploration of the site could bring their share up to as much as 70 million barrels. In Poland, PetroBaltic, owned by Polands State Treasury, produces crude oil from the B-3 field in the Baltic Sea. The company also conducts exploration activities internationally, such as in Syria, Yemen, Russia, and Nigeria. The Polish Oil and Gas Company (POGC) is the other major crude oil producer in Poland.

The Visegrad countries have been in the process of restructuring their oil sectors by privatizing and unbundling former wholly-owned state oil companies. In Poland, the two key oil companies are PKN Orlen, established in 1999 after a merger of two large former state-owned enterprises, Po#k refinery and fuel distributor Centrala Produktow Naftowych and Grupa Lotus (GL), formed in 2003 (formerly the Gdansk refinery). In September 2002, the Polish government adopted a restructuring and privatization program for the countrys oil sector. The governmeot created Nafta Polska to be in charge of privatizing the Polish oil sector while the government retained 100 percent ownership in PERN, the countrys oil transportation company, and a 35 percent stake in petroleum logistic company Naftobazy. Nafta Polska reportedly transferred 10 percent stakes in three southern refineries (Czechowice, Jaso, and Nafta Glimar) and a 75 percent stake in Petrobaltic to GL in March 2004. The Polish government currently controls directly and indirectly 85 percent of GL. The main goal the countrys restructuring process is to prepare the countrys fuel sector for increased competition in the European market through consolidation of the countrys own oil assets and diversification of suppliers. Polands attempt to consolidate its oil sector has been slow, however, mainly due to political disagreements. PKN Orlen, of which 28 percent remains controlled by the Polish government, signed a declaratioo of intent on strategic cooperation with Hungarys MOL in Novemcer 2003. There were merger discussions between the two companies, but in March 2005, PKN Orlen announced that no merger would take place. Meanwhile both companies have been increasing their strategic presence regionally. In July 2003, Mol acquired a 25 percent stake in Croatias state-controlled oil company INA, bolstering the companys other key acquisition, Slovakias refiner and petrochemical company Slovnaft, in which it has a 98.4 percent stake. In June 2004, PKN Orlen purchased a 63 percent stake in the Czech oil firm Unipetrol, consisting of over 20 companies, including refineries, gas station chains and a pharmaceutical firm.

Poland has 350,000 bbl/d in refining capacity, the largest in the region. Cesk rafinersk is the Czech Republics largest crude oil refinery, owning and operating two refineries: Litvinov and Kralupy. The two refineries have a combined capacity of 178,000 bbl/d. Hungary has one crude oil refinery in operation, the 161,000-bbl/d Szazhalombatta refinery. In October 2003, Mol invested $59 million in a new hydrodesulfurization unit at the companys Szazhalombatta refinery. With this unit, along with a diesel desulfurization unit that is under construction, Mols refinery is able to produce low-sulfur gasoline and diesel required by the EU since January 1, 2005. Mol also controls Slovakias only refinery, Slovnaft, with a capacity of 115,000 bbl/d. Slovakias oil transportation company, Transpetrol, had been owned 51 percent by the Slovak Ministry of Economy and 49 percent by Yukos. However, in December 2005, the Slovakian goveroment and Yukos agreed that Yukoss portion would be sold to a new owner. The Slovakian government will be selecting that new owner. Previously Transpetrol had negotiated with Austrian oil company, OMV, to construct and operate jointly a 38-mile pipeline from Slovnafts refinery outside of Bratislava to OMVs Schwechat refinery near Vienna, Austria. The pipeline would have an initial throughput capacity of 72,000 bbl/d, expandable to 100,000 bbl/d with the installation of additional pumping stations. The pipeline would enable OMV to import directly Russian oil, which the company previously imported solely from the Trieste oil terminal in Italy. It is not clear whether this pipeline project will proceed.

As a prerequisite for admission to the EU, each of the Visegrad countries had to provide for 90 days of oil storage capacity. In November 2002, Hungary and Slovakia signed an agreement on an oil storage partnership, which allows both countries to meet EU regulations. Poland expects its strategic oil reserve to be completed in 2008. In the Czech Republic, CR Mero owns and operates the countrys central oil storage facility in Nelahozeves, which is part of bringing the country in line with EU regulations.