Oil

JSC "Georgian Oil and Gas Corporation" (GOGC) acts with the status of the National Oil Company in the field of oil and gas exploration and production. The functions assigned by law include operational and commercial partnership of oil companies operating in Georgia, supervision of their operation planning and performance of works, acceptance and disposal of the state’s share of oil and gas, ownership of oil and gas wells and other infrastructure, their management upon instruction of the state etc. Apart from functions of the National Oil Company, GOGC acts as the operating company on some license areas, produces oil and gas, and carries out their primary treatment, storage and sale.

The current, scientific methods and technologies of exploration and production of oil and gas fields were introduced in Georgia and all over the world in the second half of the 19th century. Development of this sector in Georgia is associated with the National Oil Company "Georgian Oil" which started to operate in 1929 and currently, JSC "Georgian Oil and Gas Corporation" is its successor. Annual production of oil was sharply increased in the highly productive fields discovered in the suburbs of Tbilisi in 1970s and 1980s (Samgori-Patardzeuli-Ninotsminda, Teleti, Samgori South Dome) and exceeded 3 million tons per year in 1980-1983.

Presently, 15 oil fields and 1 gas condensate field are discovered and being processed on the aboveground territory of Georgia. In total, more than 28 million tons of oil and 3 billion cubic meters of gas have been produced from these fields.

The shelf and aboveground territory of Georgia is divided into License Areas (so-called Blocks).

Exploration and production works are carried out by investor companies selected through international tenders, on the basis of Production Sharing Contracts signed with the State. The works are performed by operating companies established in Georgia.

As of today, 24 Production Sharing Contracts are concluded between the Georgian State and investor companies and apart from GOGC, 7 oil companies are operating under these Contracts: "Norio Operating Company", "Block Operating Company", "Kura Basin Operating Company", "NVP Georgia", "West Gulf Petroleum Engineering", "Georgia Coalition Energy Limited", "OMV Petrom".

Oil Production

Oil and gas production industry is governed by the Law of Georgia "On Oil and Gas" and bylaws issued based on it. On the basis of this Law,
GOGC has the status of the National Oil Company (NOC) and it performs functions assigned by the legislation which implies participation in drafting and
negotiating the agreements between the State and Investors and their approval; acting as a commercial partner from the Georgian
part in the agreements; regulatory evaluation of mining work plans and technological schemes for exploitation of mineral resources;
administering the state share of produced oil and gas; creation of the joint coordination committee with the Investor for management of
the agreement; implementation of operating and commercial rights and obligations of the state party in the agreements;
implementation of other sectoral functions assigned by the state including maintenance of wells located on a non-licensed area
on behalf of the state and other oil operations.

GOGC represents the owner of sectoral state property (wells, special equipment, railway dead-end, oil-accumulation system, warehouses etc.)
and has a right to transfer it into the ownership of respective license-holder Investors.

In addition to performance of NOC functions, GOGC performs sectoral economic activities, in particular,
it has the oil primary treatment enterprise with 50 000 ton tank farm where services are provided for treatment of crude oil
to stock-tank condition and its storage until the sale.

Also, GOGC holds the license for oil production and produces oil on the license area.

Oil Transportation

The Baku-Tbilisi-Ceyhan (BTC) and the Western Route Export Pipeline (WREP) transport oil through the territory of Georgia.

BTC pipeline exports oil extracted from the Azeri-Chirag-Gunshli field to the Ceyhan port in Turkey. BTC is the second longest pipeline in the world. The total length of the pipeline is 1.768 km with              229 km in Georgia. The pipeline has eight pumping stations, two of which are located in Georgia.

Oil transportation through the BTC pipeline started in 2005.
WREP also known as the Baku-Supsa Pipeline is the first investment of International Oil Consortium in Georgia, which has been in operation since 1999.

The length of the WREP is 830 km. Its diameter is 530 mm. The pipeline transports crude oil from Azeri-Chiragi-Guneshli oil field to the Supsa terminal in West Georgia. The Supsa terminal with the            capacity of 120 000 tons was constructed as part of the (WREP) pipeline construction project.

Oil was first pumped into the WREP from the terminal at Sangachal in December, 1998 and the first tanker was loaded at Supsa in the summer of 1999.