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financing from the European Bank for Reconstruction and Development (EBRD).
Wind farms with 350 MW of installed capacity will be built in Georgia by 2021, according to Deputy Minister of Economy and Sustainable Development Davit Tvalabeishvili, as quoted by Business Media. According to Tvalabeishvili, 350 MW is the maximum power that the Georgian electricity system could receive from wind farms at this time.
"We conducted a study with German experts and found that by 2021, with the reserve capacities we have in the system, we could build about 350 MW of wind power stations and about 130 MW of solar power. If we build more, we could face blackouts since we do not have enough backup capacity," he was cited as saying.
The government has developed incentives to support the development of wind farms. It will pay 6.5 US cents per kWh over the first 10 years of operations.
9.2 Major corporate news 9.2.1 Oil & gas corporate news
Georgia-focused Block slashes spending, shuts down wells
Georgia-focused junior Block Energy has followed its larger peers in announcing steep cuts in spending.
The company, which last month unveiled a deal to expand its Georgian operations, announced on April 7 a 40% reduction in its cash spending. It also said it would shut down its two producing wells at the West Rustavi gas field in order to conserve gas resources until a sales pipeline is finished later this year. The pair had been flowing at a combined rate of 325 barrels of oil equivalent per day (boepd).
The wells have gas-to-oil ratio of around 50:50, and Block Energy wants to save the gas until it can extract it at a higher margin. Early stage gas production facilities are en route to West Rustavi, the largest of Block Energy’s three fields, located near the Georgian capital of Tbilisi. The wells’ oil has a Brent break-even price of only $24 per barrel.
Depending on the oil price, Block plans to continue producing crude at its Norio and Satskhenisi fields, and if necessary store the barrels until prices recover.
“These are unprecedented times for the global economy in general, and the oil and gas sector in particular,” the London-listed firm’s CEO Paul Haywood said in a message. “We have to navigate our business through a new environment of low oil prices, a slowing wider economy and countrywide lockdowns. With the implementation of the measures announced today, we have made our business significantly more sustainable, as well as conserving our hydrocarbon assets for the future.”
Block Energy has $3.4mn in cash and $470,000 worth of oil in storage. Haywood added that Block Energy was working “tirelessly” to wrap up a deal to acquire two oil and gas blocks situated adjacent to its fields from Schlumberger of the US. It is weighing up opportunities to re-enter existing wells at the XIB block, including the Pat E-1 deep gas borehole, with the aim of sidetracking it and adding a horizontal section.
Earlier data from the well suggest the penetration of structures holding around 17bn cubic metres of in-place gas, it said.
“Drilling a horizontal hole in the best zone has the potential of changing these resources into reserves, ready for production,” Block Energy said.
With first large-scale gas sales on the way and a comprehensive development
56 GEORGIA Country Report June 2020 www.intellinews.com
