Georgia to tout oil refinery via international stocks
09 December, 2010
Georgia to tout oil refinery via international stocks

The project of a new oil refinery construction in Georgia is supposed to be put at international stock exchanges. The oil refinery is supposed to meet local market demand as well as export the oil product. 
After unsuccessful attempts to make Azeri and Kazakh investors build a new oil refinery in the country, Georgian government changes tactics and plans to tout the oil refinery idea via international stock exchanges.
Georgian demand for oil and oil product accounts for about million

tons per year, and it is fully dependent on import. Meantime Georgia extracts some oil locally [about 50 thousand tons per year] that completely is exported abroad due to absence of the oil refinery infrastructure.
An old oil refinery operating in Batumi [the Black Sea outlet of Georgia in Ajara region] since soviet times is absolutely run-down. The enterprise is now owned by Kazakh national Gas and Oil Company KazMunaiGas that planned to rehabilitate the infrastructure, but stopped the rehabilitation plan due to financial crisis in 2008.
On the other hand the State Oil Company of Azerbaijan (SOCAR) having acquired Kulevi Oil Terminal project [located near Poti, Black Sea outlet of Georgia] in 2004 pledged to build a new oil refinery with 5-10 tons of annual capacity, but did not actually as of yet. The excuse is financial crisis again.
Soso Tsiskarishvili,  an energy sector analyst,  supposes the reason is they cannot see the profit in the venture as far as construction of oil refinery demands big investments that can be paid-off only if the refinery is at least 2-3 million tons of annual productive capacity. Georgian insignificant extraction cannot insure that much volume.
Therefore the new oil refinery idea was not popular to government until this year when the upcoming Azerbaijan-Georgia-Romania-Interconnection [AGRI] project focused on transportation of liquefied Azeri gas to Romania via Georgia was born.
The AGRI idea is based on construction of LNG [liquefied Natural Gas] terminals in Kulevi and Constanta tentatively, and Georgian government’s expectation is that the LNG project coupled with the developing Free Industrial Zone infrastructure in Poti can lay ground to oil refinery project success: to meet increasing local demand and hit oversea export markets.
Georgian national Oil and Gas Corporation (GOGC) announced a tender on feasibility study of construction an oil refinery plant in this past June and an American-based OTC Capital won the tender. The feasibility study is supposed to outline the exact price and productive capacity of the oil refinery [the project tentative value fluctuates between USD 800 million and a billion, and productive capacity between 3.5-4.5 million tons per year].
To convince investors including neighboring oil exporter giants Azerbaijan and Kazakhstan that the oil-refinery project is promising Georgian government decided to put the project at international stock exchanges.
According to Aleko Khteaguri, Minister of Energy of Georgia, as soon as the feasibility study is completed a company responsible to implement the refinery project will be founded. Approximately 20-30% of stocks of this company are supposed to be put at IPO [Initial Public Offering] at international stock exchanges including London and Zurich first and foremost. The remainder 60-70% is expected to attract commercial loans to finance the oil-refinery construction works and put it into exploitation ultimately.
“And only afterwords the state will decide whether or not to keep its stocks in the Company and enjoy profits of dividends or divest its package,” Khetaguri told Georgian Journal.
To feel the ground to IPO of the projected refinery [and to attract more investments to energy sector generally] Khetaguri has already visited Kuwait and met Kuwaiti Investment Agency, Investment Fund and Financial House. However attraction of investment groups of other countries is also considered. 
“After the American company gets through with the feasibility study we will have a high-level expertise evaluation how profitable the refinery venture is. The key thing why we want to put the refinery project on IPO is to show potential investors the profit and attract more investors. And as far as stocks of the project will be put in free circulation at international stock exchanges the circle of potential investors is supposed to increase. The more foreign stockholders are attracted in the project the more companies will be able to have an insight of Georgian energy sector and got interested in new [upcoming] projects,” Khetagur eiaborated.   
He does not rule out that in construction of the oil refinery in Georgia Kazakh and Azeri investments can be attracted along with the Kuwaiti ones. Construction works are supposed to start not later than first half of 2012 and be through in 2-3 years.

Print
Other Stories
The World Digital Mining Summit to be held in Georgia
The summit is scheduled to take place between 21st-23rd September in the Hualing Hotel, Tbilisi, Georgia.
Galt and Taggart - Tourism Boom Continues in Georgia
Tourism has become one of the key drivers for the Georgian economy. Galt and Taggart has recently published research about the Georgian tourism sector in the first half of 2018.
"The worst dream for Putin is that Russians want to live in Georgia"
This year, visitors to the Adjara region would notice that there is a boom in construction in and around Batumi.
Underground gas storage facility to be built in Georgia
KfW, a German government-owned development bank signed a EUR 150 million promotional loan with the state-owned Georgian Oil and Gas Corporation (GOGC) for the construction of the first underground gas storage facility in Georgia.
New gambling rules for Georgia
Georgian lawmakers are preparing a new draft law relating to online-casinos and gambling that will seek to curb gambling addiction in Georgia.
How expensive is it to visit Georgia?
The Georgian Lari (GEL) is the official currency of Georgia and is the only legal means of payment in the entire territory of Georgia.
Trade with the EU and the Commonwealth of Independent States (CIS) has grown significantly
Trade with the EU and the CIS has grown by 26% and 33.5 % respectively, says GeoStat, the Georgian National Statistics Office.
The unemployment rate decreases in Georgia
The unemployment rate decreased in Georgia by 1,9% and amounted to 12.1% in the 2nd quarter of 2018 compared with the previous quarter,
Memorandum of Understanding to be signed between Georgia and Malaysia
According to the Georgian Ambassador to Malaysia Nikoloz Apkhazava, Georgia plans to sign a Memorandum of Understanding (MoU) with Malaysia.
“Blauenstein Georgia” due to expand in Georgia
“Blauenstein Georgia” is planning to open more shops in Georgia. It is an agriculture company that sells meat products, meat and convenience food.
The amount of Direct Foreign Investment rises in Georgia
According to the information of the National Statistics Office of Georgia, the amount of direct foreign investment in Georgia has risen
It’s going to get  harder for foreigners to get residence permit in Georgia
It’s going to get harder for foreigners to get permit of residence in Georgia.
Mziuri Park in Tbilisi to be renovated soon
It was the dream of prominent Georgian writer Nodar Dumbadze that when the original Mziuri park was constructed and opened in 1892 that it should be a park for children,
Winemakers to produce Kvanchkara in its place of origin - Racha
Khvanchakara is a semi-sweet Georgian red wine which originates from Racha, in the western part of Georgia. Kvanchkara is made of two types of grape Mujuretuli and Aleksandrouli.
The level of Georgian wine and Chacha exported has increased
The National Wine Agency of Georgia has recently published statistical information about the level of Georgian wine and Chacha exported between January and July, 2018.
New fire engines to be Manufactured in Georgia
The Acting Head of the Emergency Management Agency Shalva Khutsishvili said that the old Zili fire engines (which were made in the USSR) will be phased out and replaced with new ones, manufactured in Georgia.
Georgia witnesses a record number of tourists
The Georgian National Tourism Administration publishes statistical information about international visits to Georgia.
Canadian businessman plans to build a hotel in Bakhmaro
Canadian businessman Vadim Malishev plans to build a hotel in Bakhmaro resort, Guria, in the western part of Georgia.
Coffee Factory will open in Tbilisi in October
The first coffee factory (which will be located on the Kakheti highway) in Tbilisi will open in October.
Places in Georgia where real estate is the most expensive
The real estate market in Georgia is growing annually. In Tbilisi as well as other regions of Georgia new developments are increasingly taking place.
How much does a vacation cost in Tbilisi?
It is the middle of summer and those who have not yet taken a vacation are looking for an appropriate place for sure!
The price for extreme sports in Georgia
Georgia offers a variety of options to extreme sport lovers.
The number of Georgians who own property abroad increases
The number of foreign properties owned by Georgians is increasing.
How much does Taxi cost in Tbilisi?
Stories how Taxi drivers try to deceive passengers and charge them with more money than they should pay are known for everybody all over the world.
What are the highest paid areas in Georgia
According to the data collected by the National Statistics Office of Georgia in the first quarter of 2018 the highest paid jobs in Georgia are found in the financial and insurance fields.
PHOTO OF THE DAY
Exchange Rates
GEL Exchange Rate
Convertor
24.09.2018
25.09.2018
USD
1
USD
2.6216
2.6226
EUR
1
EUR
3.0854
3.0868
GBP
1
GBP
3.4584
3.4416
RUB
100
RUB
3.9340
3.9814
Other Stories
Recently Toyota rolled out Global Campaign under this slogan that reflects the Olympic and Paralympic Spirit of Encouragement,
A couple from Switzerland combines Swiss tradition and technology with Georgian products. Their cheese is made in the Georgian mountains and sold in local stores and hotels.
It has been more than five years since the residents of Lilo village, near Tbilisi, cannot open their windows.
63 000 GEL was received by the Georgian Agro Export Group which is just a small part of the European Neighbourhood Programme for Agricultural and Rural development.
Georgian entrepreneur Guka Tavberidze, who runs his own business in the UK and does it quite well, has been invited by BBC
The grand opening of 7-star The Biltmore Hotel Tbilisi took place in Georgia’s capital on July 31.
DUSHETI, Georgia – The Georgian government and the World Bank will allocate USD 5.6 million (12 million GEL) to fund
A new Georgian clothing brand named Person has emerged in Georgian market.
Georgia is in the midst of an economic maelstrom, Euronews reports.
Situation at Georgia’s mineral water market is interesting: over the last year, the volume of export has grown by 56 percent. According to “GeoStat”, over $114 million worth of mineral water was sold
GEL Exchange
USD
1
USD
2.6226
EUR
1
EUR
3.0868
GBP
1
GBP
3.4416
RUB
100
RUB
3.9814