Georgia to invest $84 mln to develop oil and gas sphere this year

By AzerNews

Some $84 million is planned to be invested in exploration and production of oil and gas in Georgia this year, and the start of oil exploration generates a new interest from investors, Energy Minister Kakha Kaladze said Wednesday while visiting the areas of oil and gas company Jindal Petroleum LTD in Okami and Sartichala.

Kaladze said major companies are interested in carrying out exploration works in Georgia, including India's Jindal Petroleum LTD. It started drilling operations in January and began producing oil as early as in March. There is high probability to boost production up to 50,000 tons.

Kaladze also noted that several companies have already received the licenses for exploration operations.

Regular exploration work to estimate oil and gas resources, drilling operations to discover wells and oil production in Georgia were launched in the 1920s following the establishment of the special enterprise Saknavtobi. In the last 70-80 years extensive exploration work has been carried out. As a result, 16 oil fields, one gas and one gas and oil deposit were discovered.

However, since that period oil production has dramatically decreased and the annual production is at 60-140 tons, since new fields are not being discovered and the production rate at the existing fields is declining.

During the last 10-15 years foreign oil companies started operating in Georgia after concluding agreements with the government.

Investors in these operations are several companies, including American-British Blake Oil and Gas, which mainly operates in Kakheti, eastern Georgia, and the Indian Jindal Petroleum, with operations spanning several regions, as well as Israeli Elenilto.

Although energy companies have already carried out significant exploration works at their licensed territories (Anadarko in the Black Sea shelf, CanArgo in the Tbilisi adjacent area, and Frontera in the Kakheti region), new fields have not been discovered yet, despite the promising geological exploration prospects.

Foreign investors will invest in oil exploration and production in Georgia at least 150 million U.S. dollars, neftgaz.ru website reported.

Some $68 million was spent on exploration and production of oil in the country in 2012.

50 tons of oil per year are currently produced in Georgia. There are no oil refining capacities in the country, and all mined raw materials are taken abroad, according to streampress.com website.