Information on Georgia
Georgia is located on the international waters of the Black Sea bounded by Russia to the North, Turkey and Armenia to the South and Azerbaijan to the East.
Having been incorporated into the Soviet Union in 1921, Georgia declared its independence in April 1991. A new constitution was approved in August 1995, which reinforced a presidential-democratic form of government, providing for a strong executive branch and a unicameral 235-seat parliament. Its current President, Mikhail Saakashvili, was elected by popular vote in January 2004 and succeeded Eduard Shevardnadze who resigned from office in late 2003 under peaceful pressure from reformists. The current government comprises an alliance of the main political parties, which gained almost two-thirds of the vote in the parliamentary elections held in 2004. Significant progress has been made on law enforcement and economic reform, including the collection of taxes, and the implementation of a comprehensive privatisation policy. Following a brief period of political demonstrations in November 2007, President Saakashvili voluntarily declared an early presidential election in January 2008, which he handily won, garnering over 50 percent of the vote.
Georgia enjoys political and financial support from the United States and the European Union, has been a member of the World Trade Organization since June 2000, and recently received positive assessment from the International Monetary Fund regarding its economic performance and fiscal position. In its 2007 “Doing Business Survey,” the World Bank named Georgia the number one reformer in the world. The country has made substantial economic gains since 1995, achieving annual GDP growth and controlling inflation, with GDP expected to rise by five percent in 2010 and to continue at a similar rate long-term with support from heavy investments into infrastructure and the services sector. Georgia has recently received ratings of B+ and B+ from Standard and Poor’s and Fitch, respectively. (For more information on Georgia’s investment environment, as well as Georgian economic and sector overviews, please click here: Invest in Georgia. Other country specific information can be found by clicking here.)
Georgia is situated in a geologically favourable position at the western end of the oil rich geological province known as the Kura Basin. This basin extends eastward from Eastern Georgia into Azerbaijan and the Caspian Sea and is home to some of Azerbaijan’s most prolific onshore and offshore oil fields. Fields in offshore Azerbaijan are now producing more than 600,000 bpd. In 1981, during Soviet times, production of oil and gas in Georgia exceeded 70,000 bpd. Georgia also holds a strategic position in the region for East-West transportation of oil and gas as it provides the land bridge connecting Azerbaijan and the countries surrounding the Caspian Sea to the Black Sea and the Mediterranean Sea. Since the break up of the Soviet Union in 1991, western oil companies such as ExxonMobil, BP, Royal Dutch/Shell and others have successfully entered the Caspian Sea region committing billions of dollars of new exploration and production investments.
BP leads an international consortium that has invested in three major oil and gas pipelines passing through Georgia. BP has also made significant investment in an oil and gas terminal on the Black Sea port of Supsa and is pursuing deepwater exploration and production activities adjacent to the southern border of Georgia situated offshore of Turkey. CanArgo Energy is conducting oil and gas operations over an extensive portfolio of prospects in the onshore region of eastern Georgia located close to Block 12. Anadarko Petroleum and JKX Oil and Gas are also pursuing deepwater offshore oil and gas exploration projects in the Georgian waters of the Black Sea. Major international companies, including Baker Hughes, Schlumberger and Weatherford, as well as other regional companies, represent the oil service industry in Georgia.
All of the above factors have combined to create a more economically and politically stable climate in which to invest. The development of an extensive transportation infrastructure has also helped the region to become increasingly attractive to foreign oil exploration and production companies by enhancing the economic viability of pursuing exploration and production projects in Georgia.