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38. Contractual obligationsThe Company and the group have certain permanentbusiness and financial obligations, which are a part of theregular business operations, and include:• investments in refineries for the purpose of meetingthe latest standards for fuels;• exploration work on wells abroad;• research and development obligations resulting fromthe joint production contract;• obligations to procure imported gas from Russia asa supplement to domestic gas production in orderto meet domestic needs;• performance bonds, letters of credit and otherguarantees with Croatian and foreign Banks;• completion of the construction of certain buildings.Details on the guarantees regarding short-term bank loansand overdrafts by current account are contained in note 24.Investments in refineriesDuring 2005, the Investment Center for Modernizingrefineries was established based on a decision by the INAd.d. Management Board. The Company projected a capitalinvestment program for its refineries in order to producefuels which meet the increasingly strict environmentalcriteria (regarding the quality of oil products) which areapplicable on the European market. The modernizationof refineries should also comprise the ever stricter antipollutionrequirements during fuel production.The aim of the establishment of the Investment Centerand the teams of which it consists is to manage therealization of modernization projects for the Sisak andRijeka Oil Refineries. The Program’s goal is to meet theEuropean standards for the quality of oil products anddeadlines which have been established for the startof their implementation. The construction of new andmodernization of the existing plants will significantlyincrease the refineries’ processing capacity and greatlyreduce the pollution of the environment.For the realization of the refinery modernization project,59 contracts with contractors and suppliers, in the totalamount of 2.66 billion HRK have been concluded on 31December 2007.Investment in energopetrolBased on the investment in Energopetrol, the INA andMOL Consortium undertook the obligation under theRecapitalization Contract to invest 150 million BAM in thenext three years, from the day of transaction execution:1st year of investment - the amount of 20 million BAM(about 10 million EUR)2nd year of investment - the amount of 35 million BAM(about 17.5 million EUR)3rd year of investment - the amount of 95 million BAM(about 47.5 million EUR)Participation and joint businessoperation agreementParticipation and Joint Business Operation Agreementfor the contract area “Podravska Slatina-Zalata”On 14 September 2006, INA d.d. and MOL concluded theParticipation and Joint Business Operation Agreementfor the contract area Podravska Slatina - Zalata. Thecontracting parties will equally share 50% of theparticipation segment in the Agreement.Under the Agreement, the exploration period lasts fortwo years from the day of execution of the Agreement.In the event that there is no commercial discovery duringthe exploration period, the contract will be terminated.In any case, the total duration of this Agreement willnot exceed the period of twenty-five years from the datewhen first regular produced deliveries begin (“the InitialCommercial Production Date”) with the possibility ofprolonging the development and production period bysubsequent periods up to a maximum of five (5) yearsaccording to the same conditions.Based on positive results of investigations in 2007 and thediscovery of a gas condensate field, the drilling of the sec-154 Financial report