Rosneft in Georgia creates scandal

The Russian oil company Rosneft has sheltered at Georgia’s Poti Port owing to the business operations carried out at the end of 2014. This has caused much controversy. The opposition United National Movement (UNM) is demanding a swift reaction to this “unacceptable” development from the government, while the Georgian Dream accuses the UNM of making much ado about nothing.

Rosneft released a statement on December 29 that reads that the company agreed to buy 49% of stakes in Petrocas Energy Limited, and to launch a joint venture with the company for its oil shipment, storage, retail and logistics activities in the South Caucasus.

Petrocas owns the oil terminal in the Georgian Black Sea port of Poti through its subsidiary Channel Energy and operates one of Georgia’s largest retail chains under the Gulf brand. Through its subsidiaries, Petrocas also carries out logistics and oil shipment operations.

Head of Rosneft, Igor Sechin, said the joint venture would provide Rosneft with new opportunities for its operations and will secure supplies under existing contracts. Moreover, it will allow for the expansion, supply, trading and logistics capabilities of the company.

“I am sure, that this partnership will play a key role in the security of energy supplies of the region,” he said.

Chairman and main shareholders of Petrocas, David Iakobashvili, said the deal will provide success for Petrocas as a regional player.

Head of Georgia’s Economic Development Center Roman Gotsiridze, a former a close ally of Saakashvili, said that “Putin’s major economic lever, the company sanctioned by the West grabbed the Poti Port.”

“The crowning moment will be the re-opening of the Abkhaz Railway,” he said.

Gotsiridze said that the government must not allow the deal.

“There is a legal reason to ban the deal, as the company is undertaking an illegal operation in the Black Sea Basin through an unlawful license issued by the de-facto government of Abkhazia,” Gotsiridze said.

“If the decision is made behind the government’s back, the Georgian Dream authorities must urgently respond to the issue,” he said.

Government representatives have stated that appearance of Rosneft in Poti was unexpected for them. They claim that they have no levers to crush the deal and accuse the previous government of creating the problem.

“Petrocas was a property and a pocket company of the former government,” Minister of Economy Giorgi Kvirikashvili said.

Minister for Civil Reconciliation Paata Zakareishvili suggested opening an investigation in order to reveal whether the UNM was involved in the deal or not. Minister of Energy Kakhi Kaladze said that the government has no levers to hamper the transactions, as they were undertaken in an offshore zone.

The opposition has dismissed the government’s statements and said that the Georgian Dream is trying to find a scapegoat.

UNM representative Mikheil Machavariani said that the government had detailed information with regard to the above mentioned deal.

“The statements made by the government, which are based on a lie, create an unstable business environment in the country. The emergence of the internationally sanctioned company on the Georgian market will affect the flow of investments in the country,” he said.

Fellow UNM MP Giga Bokeria stated that the government is lying when it speaks about the absence of levers.

“Rosneft operates in Abkhazia and that is illegal. The government can dissolve the deal based on its goodwill and apply international sanctions against the company. But under the new circumstances, the current government leaves no hope for it,” Bokeria said.