Georgia’s Economy Minister condemns Rosneft’s purchase of Poti Port shares

Rosneft now owns 49 percent shares of Georgia's Poti Port., 22 Jan 2015 - 18:50, Tbilisi,Georgia

Georgia's Minister of Economy Giorgi Kvirikashvili has spoken out on one of the most controversial business deal at the World Economic Forum 2015 in Davos, Switzerland. 

The heavily discussed business deal revolved around the sale of shares of Georgia's Poti Port Oil Terminal, where 49 percent now belonged to Russia’s state-owned oil producer Rosneft.

The Poti Sea Port is Georgia’s major seaport and harbour off the eastern Black Sea coast. It is the only terminal in Georgia which is able to unload oil products from tankers.

At the forum Kvirikashvili said the Georgian Government cannot interfere in the relationships between private owners, although during his speech he did hint at the idea that former president Mikheil Saakashvili had "connections" to the deal.

"The previous government deprived Poti Port Oil Terminal of strategic status. However it still remains as strategic object for Georgia but not on legislative bases,” he said.

The former owner of Poti Port Oil Terminal Tamaz Nijharadze disputed the sale of the facility and the arrangement between Rosneft and Russian-based Georgian businessman Davit Iakobashvili. Nijharadze's lawyer Shalva Khachapuridze said the property was illegally confiscated. The issue is still being debated in court.

"It is unclear for me how Iakobashvili could sell the shares when a court has not finished discussions on illegal confiscation of the property yet,” Khachapuridze said.

Meanwhile the initiator of the deal, Davit Iakobashvili, who also attended the World Economic Forum in Davos, commented to media as well and said: "Why Rosneft? Because more than a thousand people will be employed at the Poti Port Oil Terminal and about $200 million USD investments will be implemented by Rosneft." 

"I do not interfere in politics and on the other hand the Government should not interfere in my business activities," Iakobashvili said.

Rosneft issued a statement on its website on December 29, 2014, stating it had purchased a 49 percent stake in Petrocas Energy Ltd from Iakobashvili, the owner of the facility.  

The statement said Rosneft launched a joint venture with the company for its oil shipment, storage, retail and logistics activities in the southern Caucasus. Before the deal Petrocas Energy Ltd owned the 100,000 barrel per day oil export terminal in Poti, used for Azeri and Kazakh oil shipments, through its subsidiary Channel Energy and a network of gas stations in Azerbaijan, Georgia and Armenia.

"Through this deal Rosneft will significantly enlarge its presence in Transcaucasia,” read the Rosneft statement.

Russian media now claimed the Poti Port Oil Terminal and several Gulf petrol stations had since become the property of Rosneft property but Iakobashvili remained the main shareholder.

"Borjomi, tangerines and many other products are exported from Georgia to Russia. Shipping these products at affordable price is very useful for everyone. Do not interfere in my business and I will do everything very well,” said Iakobashvili.

Georgia's Economy Minister condemned the Rosneft deal and noted that Petrocas Energy Ltd was previously owned by Saakashvili, who is currently under investigation by local authorities, and former defense minister David Kezerashvili, who is also facing criminal charges in Georgia. 

Minister Kvirikashvili added he could only criticize the deal as the Georgian Government had no authority to control the actions of Petrocas Energy Ltd.

Iakobashvili responded: "This was a business deal through private companies. Moreover, Poti Port Oil Terminal is not a strategic object any more. This is the smallest terminal in Georgia. The Government should not know what I do in general."