LLC Georgian Oil and Gas Corporation (GOGC) began under the March Twenty one, 2006 decree of Minister of Economic Development.

The state co-participation ratio in the organization made up 100%. LLC Georgian Oil and Gas Institution became an assignee connected with JSC Georgian Gas International Enterprise and JSC Georgian Oil Foreign Corporation.

Before 2016, LEPL Enterprise Organization Agency, a body under management of Ministry of Economic climate, used to perform fees of the corporation companion.

In 2016 amendments were made towards president’s decree and 76% of the business were transmitted so that you can Ministry of Energy within management rights. Good above-mentioned, on September Twenty one, 2016, changes were made in order to agreement on transmitting of shares in addition to stakes under administration right. The document was signed by way of Ministry of Economy and Ministry of Energy. Underneath government resolution,? 100% involving corporation shares ended up being directed to the capital connected with JSC Partnership Fund.

In 2016, 2016 along with 2016 the corporation has received One particular 201 747 685 GEL revenues, which include operating incomes marked 988 320 290 Carbamide peroxide gel and nonoperating revenues created 213 427 395 GEL. Salaries for directors general as well as financial, commercial in addition to technical managers throughout 2016 was 13 180, 10 200 along with 9 000 Serum, in 2016 – 12 Five-hundred, 10 200 as well as 9000 GEL and in 2016 C 10 500, 10 2 hundred and 9 500 GEL. Bonuses of directors general along with their assistants in 2016 composed 80 522, 62 Two hundred and 58 900 GEL respectively.

Gas Taken without Purpose

In 2016-2016 five international companies extracted 24 million cubic meters for accompanying gas at 14 drills, this 11 million cubic measures were emitted to the air or burned up on Tower and that gas was not useful for commercial goals.

Under your agreement between the organization and the contractor about product interest allocation, the extracted associating gas may be used pertaining to commercial purposes by way of the side that takes it as a commercial item. The auditing service review reads: “The corporation didn’t submit a decision of either contractor or its user about commercial individuality of gas. The corporation has not submitted natural gas utilization plans either”.

Based on the above-mentioned circumstance, the auditing services has issued advice, under which the fuel corporation,? for marketing of revenues via gas extraction, should carry out more effective calculates. Namely, if the builder and corporation agree with the fact that excessive related gas does not have professional value, then other plan should be produced for gas consumption.

The firm has sent correspondence to the Ifact to explain which Georgia does not own personal commercial gas discipline and extracted gasoline is only the gas enclosed oil extraction practice in very small sizes.

“That volume of accompanying natural gas that may be supplied for you to consumers is sold by just investor companies in the marketplace,while noncommercial volume (or perhaps gas volume, which can be unprofitable to supply because of its smaller volumes and insufficient due infrastructure) is actually subject to utilization by means of investor companies, together with, the gas should be emitted to the atmosphere or burnt, with compliance with world-wide practice of essential oil industry and Georgian laws requirements.

Questionable Deals

In 2016 JSC Georgian Oil and Gas Business signed an agreement along with LLC New-Energy for construction for electricity transmission strains and substations in Svaneti. Whole value of the arrangement was 44.Five million GEL. The particular auditing service report visits that the company provides cut 546.174 cubic meters for ground, while in the situation of 24-hour operation, excavators might cut only 315.548 cubic m of ground, along 230.626 cubic meters as compared to the really fulfilled job.

The exact situation is duplicated in case of transportation for cut ground, if the performed job is actually appraised by 558 672 cubic mirielle of ground, even though machines could trim only 375 774 cubic measures of ground with 24-hour regime operation.

Tornike Shermadini, travel of State Auditing Service Department for Auditing Monetary Activities, noted they expect the Prosecutor’s Office environment to investigate the case.

Partnership between your corporation and LLC ElGeorgia-2006 likewise raises certain queries. The construction project of the company, according to the auditing service, does not comply with any agreement requirements. During the mentioned cooperation the provider cut and transferred? ground of VII grouping and received About three.9 million Serum in exchange, while, depending on geological-lithology research works on the showing territory, this group of ground is not registered at all.

Unclear Administration connected with Funds Attracted via Bonds

Under loan agreements brought in between JSC Georgian Oil and Gas Business and LLC State Support Bureau on September 5, 2016 and May 27, 2016, the Bureau received 15 mil USD and 15.5 million USD loans from the corporation and the annual rate of interest of the loan noticeable 11% (total of 28.5 million USD).

The loan was to be paid within a year once the loan agreement entered force. Because of unfulfilled agreement terms, from October 10, 2016, the amount of 26 443 929 USD had not been paid.

Because of the debtor’s financial problems, LLC State Service Bureau plus the corporation signed a binding agreement on May 21 years of age, 2016 and the unpaid amount (26 443 928 USD) had been restructured. To serve this assumed obligations, the borrower mortgaged a 100% position of Batumi Tower regarding the corporation. Under the article 5 of the deal, the mortgagor was obligated to maintain the mortgaged area of interest value (85 738 1,000 GEL) within the agreement validity period. Having said that, on April Six, 2016 LLC Batumi Tower property had been sold at Twenty five 004 426 USD and the valuation of the mortgaged property seemed to be significantly reduced.