Page 54 - GEORptAug21

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
Azerbaijan’s 10 month oil exports via Baku-Tbilisi-Ceyhan pipeline fall 11.2% y/y/
TAP gas pipeline declared ready to operate
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.
OMV’s upstream director Peter Zeilinger has said that the Georgian block would be part of the company's strategy to expand its upstream activities in the Black Sea region. "This is another milestone following the signing of a contract to enter the Han Asparuh exploration licence offshore Bulgaria," Zeilinger said last June.
Georgia is the only country in the Black Sea basin where oil and gas works are not under way on the shelf.
Azerbaijan’s oil exports through the Baku-Tbilisi-Ceyhan (BTC) pipeline that runs via Georgia to Turkey declined by 11.2% y/y in the first 10 months to 23.2mn tonnes, according to the State Statistics Committee as cited by Reuters.
The BTC exports oil from the Azeri, Chirag and Guneshli (ACG) oilfields operated by BP.
Azerbaijan’s oil exports for January-October totalled 29.3mn tonnes, around 80% of which was via the BTC.
The volume of transit oil, originating in Kazakhstan, through BTC decreased to 3.3mn tonnes in the first 10 months from 3.8mn tonnes a year earlier. Azerbaijan also exports oil via Russia through the Baku-Novorossiisk pipeline and via Georgia by rail and through the Baku-Supsa pipeline that runs to the Black Sea coast.
Azerbaijan’s oil exports through BTC fell 8% in 2019 to 31.135mn tonnes.
The Trans-Adriatic Pipeline (TAP), the third and final section of the Southern Gas Corridor (SGS) network designed to bring Azeri gas to southern Europe, is now ready to start flowing, its operator has said. The pipeline’s completion is a major boon for Azerbaijan, whose economy has come under significant strain this year owing to a collapse in oil revenues and the broader economic fallout from the coronavirus (COVID-19) pandemic.
54 GEORGIA Country Report August 2021 www.intellinews.com