Page 54 - GEORptNov21

Georgian oil company GOGC refinances $250mn eurobonds with EBRD loan
deadline to repay the principal, namely $500mn, came on April 12. According to the finance ministry, Georgia repaid this obligation from its own funds last week.
The European Bank for Reconstruction and Development (EBRD) is to extend a €217mn senior unsecured loan to state-owned Georgian Oil and Gas Corporation (GOGC) for the refinancing of a $250mn eurobond that matures in April 2021, the EBRD said in a statement.
The funding agreement was made in response to the economic shock caused by the coronavirus (COVID-19) pandemic.
In addition, the financial package is to support planned reforms at the state company, including the development of a natural gas exchange.
The loan will improve the liquidity of GOGC, which has been damaged by the economic impact of the COVID-19 crisis, and will alleviate difficulties in tapping the capital market, the EBRD said.
The corporation is one of the largest state-owned companies.Its revenue increased by 37% to Georgian lari (GEL) 880.6mn ($330mn) in 2019. Net profit fell 22.8% to GEL121.4mn in the year. Despite declining profits, GOGC was still one of the most profitable state-owned enterprises in Georgia in 2019.
The total assets of GOGC include main gas pipelines, as well as the combined cycle power plants Gardabani 1 and Gardabani 2—the latter of which was officially put into operation at the end of 2019. The two power plants account for 20% of the country's electricity consumption and also provide balancing system services for intermittent production at hydropower plants.
It was in 2012 that GOGC issued a $250mn eurobond and listed it on the London Stock Exchange. In April 2016, it refinanced the eurobond, with a deadline for repayment of April 26, 2021.
9.0 Industry & Sectors 9.1 Sector news
9.1.1 Oil & gas sector news
Georgia announces Black Sea offshore production sharing agreement to be signed by OMV Petrom
Georgia’s government has approved a production sharing agreement (PSA) for Black Sea oil and gas that it is to be signed by the Georgian Oil and Gas Agency and OMV Petrom in the nearest future, Minister of Economy and Sustainable Development Natia Turnava has announced. Romanian oil and gas company OMV Petrom, which won the tender for an offshore block in Georgia last summer, in October started negotiations with the country's authorities for the PSA.
“It was in fact very important that such a large company expressed a desire to participate in the tender and it won it in the summer of last year. During the [coronavirus] pandemic, this comes as especially important for the Georgian economy. OMV Petrom itself is quite famous for its activities in the Black Sea; in 2012 they discovered a large field in [territory of] Romania, we hope that their activities will be similarly successful in Georgia. Oil extraction is a promising field for us," Turnava said.
OMV Petrom was given a six-month negotiation period that started last October, during which time it was trying to reach the mutually beneficial agreement prior to making specific project commitments.
54 GEORGIA Country Report November 2021 www.intellinews.com