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Brief history of the country
Georgia lies between the Greater and Lesser Caucasus mountains and is bounded by the Black Sea (west), Russia (north), Turkey and Armenia (south) and Azerbaijan (southeast. It contains 2 semi-independent regions (Abkhazia and South Ossetia).
The country had been inhabited for thousands of years before civilisations developed from 700 BC. Colchis (west) and Iberia (east) unified in 400 BC. The Romans briefly conquered the region in 66 BC, competing with the Sassanids and then Arabs for power.
A Georgian kingdom emerged in 1008 AD which peaked in the late 13th century. Thereafter Georgia became fractured by empires including the Mongol, Ottoman, and Iranian. In 1783, the eastern kingdom of Kartli-Kakheti allied with the Russian Empire leading to complete annexation by Russia after 1801.
Georgia declared independence in 1917 and was absorbed into the Soviet Union as the Georgian SSR in 1922. Independent again in 1991 after Soviet break-up, it suffered unrest for most of the 1990s.
In 2003 economic reforms and adoption of a pro-West policy eventually led Russia to invade in 2008, ostensibly supporting separatist movements in South Ossetia and Abkhazia.
Russia now recognises these areas as independent countries but Georgia maintains they are occupied territories. Despite sanctions by Russia Georgia has an expanding economy and growing tourism.
Oil and gas summary
Georgia is a mountainous and plateau country, largely of volcanic origin. The Likhi Range divides it into eastern (Colchis) and western (Iberia) halves. Mountains also isolate the northern region of Svaneti.
The Greater Caucasus Mountains, of which the highest is Mount Shkhara at 5,068m, form the northern border whilst the south is bounded by the Lesser Caucasus Mountains subject to earthquakes.
Georgia has produced small amounts of oil and gas onshore from marginal fields in the Rioni basin in the west, especially from the Samgori area between 1974 and 1985, and from the Kura Basin in the east since the 19th Century.
Globalshift believes that there is little chance that significant new discoveries will be made. Nevertheless remedial work on old fields could increase output in the short term. The offshore area of the Black Sea would appear to have no potential although very little drilling has been carried out here, and none in deep waters.
Foreign joint ventures, onshore and offshore, operating in the country have had negligible effect in terms of growing production rates. The BTC (Baku to Ceyhan) oil and gas pipelines from Azerbaijan to Turkey pass across the country.
GEORGIA
Map and National Flag
CENTRAL ASIA
Street vendor
Central Asia
Capital
Population
Land area (sq kms)
Oil prod (000s b/d)
Gas prod (bcm/yr)
Oil cons (000s b/d)
Gas cons (bcm/yr)
Tbilisi
4.3 mm
69,700
2.7
0.03
18.1
1.9
Government
Georgia is a representative democratic semi-presidential republic, with the President as the head of state.
The Cabinet is composed of ministers, headed by the Prime Minister, and appointed by the President. Parliament is unicameral with 150 elected members.
The LEPL State Agency of Oil and Gas of the Ministry of Economy and Sustainable Development of Georgia is a governmental agency within the Cabinet of Georgia in charge of regulating activities in the energy sector.
The state oil company is the Georgian Oil and Gas Corporation.
GEORGIA: TECTONIC ELEMENTS
Globalshift.co.uk (source: ResearchGate)
Geology and History of Exploration
Georgia spans an inter-montane region between the Greater Caucasus Mountains in the north, marking the border with Russia, and the Lesser Caucasus Mountains in the south.
Within this geological suture lie two basins; the Rioni Basin in the west that stretches offshore into the Black Sea, and the Kura/Kartli Basin in the east forming the western end of a geological axis that runs from Tbilisi to Baku in Azerbaijan where it is known as the Kura Basin.
Rioni and Kartli/Kura Basins - Georgia’s basins are squeezed between two thrusted boundaries. Globalshift recognises that the sedimentary successions are similar to those of the oil productive regions of the Northern Caucasus in Russia but significantly more disrupted. Source rocks comprise the widespread Oligocene to Lower Miocene Maikop shale and shales in the Upper Eocene. Potential oil bearing Lower Jurassic shales are also present.
Productive reservoir rocks are Middle Eocene fractured volcanic tuffs, responsible for Georgia’s biggest oil field, Samgori. Cretaceous dolomites and Middle Miocene and Upper Eocene sandstones are also oil- and gas-bearing.
The fields are structurally complex. Most were discovered on the basis of seeps and surface geological mapping and they are difficult to image on seismic data due to their complex fault patterns and the erratic quality of their reservoirs. The geology of the offshore part of the Rioni basin is little known as few wells have been drilled.
History - Surface oil seeps and shallow oil pits have been exploited in west and east Georgia since the Middle Ages. In 1869 drilling was started by the Siemens brothers, who acquired licenses in the southeastern Shiraki, Mirzaani and Eldari areas on the Baku-Tbilisi axis (Kura basin). They were searching for extensions to the oil finds of Azerbaijan. These first wells (around 180) were drilled up to 38m deep and produced less than 20 bbls of oil per day. Some oil was also produced in Guria in west Georgia.
Total production from Georgia reached 14,000 bbls in 1876 from roughly 70 wells but had dropped to 8,000 bbls in 1890 and was negligible by World War 1. Proven reserves were limited and old technology could do little to reverse decline.
In 1928 a western European mining consortium drilled the first deeper well to 540m which flowed oil from a Miocene reservoir. The state-owned Georgian Oil Trust was then established in 1929 to develop this discovery at Mirzaani.
Over 20 years more than 200 production wells were drilled and oil was produced from 500-1,200m depths at rates ranging from 4 to 100 bbls per day. The smaller Shiraki Field, east of Mirzaani, was discovered in 1932 and brought onstream in 1939 from depths of up to 800m. The Norio field, close to Tbilisi, was discovered in 1939 and the Satskhenisi field (Oligocene reservoir) was discovered in 1956.
In 1962 the much deeper Taribani field in east Georgia was drilled but flow rates per well only averaged only around 10 bbls per day. In 1967 oil and gas was discovered in a deep well in an Eocene reservoir in the Teleti area, south of Tbilisi, and this led to first commercial gas production in Georgia.
Exploration now focused on Cretaceous sediments, which were the main producer in the Russian North Caucasus. In 1974 a well in the Samgori area in the west (Rioni basin) targeted the Cretaceous but instead discovered Georgia’s biggest oil field in Middle Eocene fractured volcanics. Two hundred wells were drilled and the Samgori field delivered total production of 172 mmbbls. Some wells achieved over 3,500 bbls per day.
Total output from Georgia reached a peak of 59,000 bbls per day in 1982 but such success has not been repeated. Production rates for the country dropped sharply in the second half of the 1980s.
In the early 1990’s, after independence, on and offshore Georgia was divided into blocks which were acquired as PSAs by 15 small companies in 1994. However, all these companies failed to improve production levels, managing only around 1,000 bbls per day from existing fields. In fact no new commercial discoveries have been made since the Mtsare Khevi gas find in the Kura basin in 1989.
Activities are now focused on improving output from old fields and discoveries. Currently, oil and gas exploration is carried out by the Georgian Oil and Gas Corporation (GOGC) in the Iori Valley and Samgori and by small American companies, dominated by Frontera.
The key areas are Taribani (light oil), Lake Sazare and Mtsare Gorge (heavy oil and gas) and mountain ridges such as Vashlovani, Pkhoveli and Algeti. Blake Oil and Gas (formerly Canargo) produces oil and gas from Ninotsminda (discovered in 1979), and oil from Nazvrevi, Norio and Rustavi.
The Soviets tried to explore for oil and gas on the Black Sea shelf of Georgia but did not drill any wells. In 2005 a dry well was drilled by a consortium including Anadarko and BP in shallow waters near the Batumi-Guria region but the license was then abandoned. Further north there may deep water potential but no wells have been drilled in this disputed zone off Abkhazia.
Oil has been transported through Georgia from Baku for hundreds of years with Batumi becoming an oil port late in the 19th Century. Georgia now hosts the important BTC pipelines which run from Baku to Ceyhan in Turkey.
Oil and gas production both peaked in Georgia in 1982 and there is little chance that these levels will be achieved again except by a chance discovery of a field to match Samgori.
Activity is now focused on improving production rates from old fields (when the oil price allows) and exploration of complex structures in proven petroleum systems. Deep Jurassic potential, within reservoir beds intercalated in the Maykop shales, is possible and the country may also have shale oil and shale gas potential.
Potential prospects offshore in the Black Sea are unlikely to be drilled in the short or medium term.