Oil and gas claims

Academic Zurab Mgeladze of the National Academy of Sciences claims that Georgia has enough oil and gas resources to satisfy its needs and thus secure its energy safety. He challenges President Saakashvili’s statement that there is no oil or gas in Georgia. “Who misinforms the President?” asks the academic.

The first oil well in Georgia started pumping way back in 1869. Walter Siemens, founder of the Siemens company, began oil production in Georgia and extracted 2.5 tonnes daily. Between 1981-1983 3,100,000,000 tonnes were extracted annually. However during the post-Soviet period the flow of oil from Georgian fields has gradually decreased until in 2008 Georgia produced only 52,800 tonnes of oil, 7% less then in 2007.

Several private companies are involved in the Georgian oil sector together with the state Oil and Gas Corporation. These include Canargo Georgia, which in 2008 extracted 20,500 tonnes, Frontera Resources Georgia which produced 8,800 tonnes and state-owned company Ioris Valley oil and gas which produced 22,000 tonnes.

The exploitation of Georgia’s oil wells began 25-30 years ago, so they are already considered old and the product is rather watery. However Mgeladze thinks that Georgia has more oil yet to be discovered and its resources are not exhausted, estimating that Georgia can extract 2.35 billion tonnes of oil and 180 billion cubic metres of gas from its territory. Even the exploitation of 40-50% of its gas reserves could gain Georgia billions in USD.