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Summary of Project Information (SPI) |
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| Project number | 8138 |
| Project name | Ninotsminda Oil Project |
| Country | Georgia |
| Sector | Oil, Gas and Mining |
| Department | Oil, Gas, Mining And Chemicals |
| Company name | Ninotsminda Oil Company |
| Environmental category | B |
| Date disclosed | July 16, 1998 |
| Status | Completed |
| Previous Events | Signed: December 17, 1998
Approved: September 24, 1998 |
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Summary Of Project Information (SPI)
| Project Name | Republic of Georgia-Ninotsminda Oil Company |
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| Region | Europe |
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Project No008138
Projected Board DateAugust 27, 1998
Company NameNinotsminda Oil Company (NOC)
Technical Partner and/or Major Shareholders
Canargo Energy Inc (Canargo), is a public company listed on the Toronto Stock Exchange, and has a 55.9% stake in NOC, its major asset. Canargo is shortly to finalise a merger with Fountain Oil, a public company listed on NASDAQ and on the Oslo stock exchange. The minority (44.1%) interest in NOC is held by JKX Oil and Gas PLC, a public company listed on the London Stock Exchange.
Project Cost Including proposed IFC investment
The project cost is estimated at US$19 million, of which IFC will finance US$6 million in quasi-equity.
Location of project and Description of site
The Ninotsminda oil field is located 25km east of Tbilisi.
Description of Company and Purpose of Project
The Project comprises the development of the proven reserves of the Ninotsminda oil field, the largest remaining known oil accumulation in Georgia. NOC will develop the field through the drilling of up to 5 wells, raising production from 2,000 barrels per day (bopd) to about 4,500 bopd. During development, sufficient technical data will be obtained to quantify further reserves, and to determine the economic feasibility of developing them. NOC also intends to undertake the exploration of two promising structures within the same licence area.
IFC’s presence and the ongoing success of the Project (one of the first foreign private sector investments in Georgia) will provide an important demonstration effect, further reassuring foreign investors as the Georgian Government continues to make progress in stabilising and reforming its economy and still fragile political system. The Project will generate significant revenues for the Government of Georgia through production sharing and tax payments. In addition it will improve Georgia’s net foreign exchange earnings, help develop the Georgian petroleum industry as well as related activities such as electricity generation and oil refining, transfer skills to Georgian personnel through the introduction of western oilfield techniques, and provide direct employment for about 100 local people.
Environmental Category and Issues
This is a Category B project according to IFC’s environmental review procedure. The following potential environmental, occupational health and safety impacts were key issues addressed during IFC’s environmental review: hydrocarbon contamination of soil and groundwater as a result of prior activities; land disturbance and right of way issues; the management of produced water and gas; the management of drill muds and cuttings; oil spill and contingency plans; cultural properties; and worker safety. The license area was drilled extensively during the Soviet era and the field facilities were extensively damaged during the civil strife from 1992-1994. In 1995, an environmental audit was carried out by an independent international consultant and remediation activities have been completed as recommended by the audit. An Environmental Information Report was completed in response to IFC’s request and indicates that the effects of past contamination, ongoing field development operations, monitoring and compliance are being carried out appropriately. Permitting by and regular reporting to the Georgian Ministry of Environment are in place. Plans are well under way to utilize formerly flared gas in a gas turbine power plant and to heat greenhouses being built and operated by local people. Cultural properties have not been identified on the site for this project. The project sponsors have been actively involved in supporting a number of school, church, charity and social service organizations and projects in the local community, as well as providing employment for up to 100 local people.
The is from the Public Information Center.
| Host country location of environmental documents | Dept for Protection of Mineral Resources and Mining, 87 Z Paliashvili Street
Tbilisi 380062
Georgian British Oil Company
70 Kostova Street
Tbilisi 380015 |
Date SPI sent to PIC July 16, 1998
“This Summary of Project Information is prepared and distributed to the public in advance of consideration of the proposed transaction by the Corporation’s Board of Directors. It is provided for the purpose of enhancing the transparency of IFC’s activities and should not be construed as presuming the outcome of IFC Board consideration.”
For Additional Information contact: Corporate Relations Unit -
telephone: (202) 473-7711
facsimile: (202) 974-4384 |
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| Environmental documents for this project are available at http://www.ifc.org/projects and from the World Bank InfoShop (http://www.worldbank.org/html/pic/aboutinfo.html). |
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