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Oil and Gas Law

Can foreign companies own oil and gas licenses in Georgia?

Yes, foreign companies can participate in tenders and hold licenses. There are no restrictions on foreign ownership in the oil and gas sector.

What is the duration of a typical license?

Licenses typically have an exploration phase of 5-7 years and a production phase that can last 25-45 years, subject to the Production Sharing Agreement.

Do I need an environmental permit for exploration?

Yes, oil and gas operations are subject to strict environmental regulations, requiring an Environmental Impact Assessment (EIA) and state expertise.

What taxes apply to oil and gas companies?

Besides standard corporate taxes, companies operate under a Production Sharing Agreement (PSA) regime, where "Profit Oil" is split with the state, which often replaces certain tax obligations.

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Oil and Gas Law in Georgia represents one of the most specific and strategically important areas of energy law. Georgia's geopolitical location as a transit corridor for energy resources and a potential producer requires strict and complex legal regulation. The exploration, extraction, processing, and transportation of oil and gas are regulated by special agreements signed with the state and licenses. This sector is characterized by high investment risks, complex environmental obligations, and strict state supervision. Consequently, qualified legal support is vital for both investors and local companies operating in this sector to avoid license revocation, financial penalties, and international arbitration.

What does Oil and Gas Law service cover?

Energy law specialists presented on the Legal.ge platform offer full legal services covering the entire cycle of oil and gas operations:

  • Licensing Services: Obtaining general licenses for oil and gas resource usage, special licenses for exploration and extraction, extension of terms, and modification of conditions.
  • Production Sharing Agreements (PSA): Drafting, negotiating, and legally analyzing Production Sharing Agreements with the state (State Agency of Oil and Gas).
  • Environmental Compliance: Managing the Environmental Impact Assessment (EIA) process, obtaining ecological expertise permits, and monitoring compliance with environmental obligations.
  • Land Rights and Easements: Purchasing land, leasing, or obtaining easement rights for infrastructure placement (pipelines, wells), and negotiating with private owners.
  • Regulatory Relations: Representation before the Georgian Oil and Gas Corporation (GOGC), the State Agency of Oil and Gas, and the Georgian National Energy and Water Supply Regulatory Commission (GNERC).
  • Dispute Resolution: Handling licensing disputes in court and representation in international arbitration tribunals regarding investment protection.

Common scenarios when you need this service

Involvement of an oil and gas law expert is necessary in the following cases:

  • When a foreign investor plans to participate in a state tender to obtain a license for oil blocks.
  • If a company is negotiating with the state to revise PSA terms (e.g., extending the exploration period).
  • During pipeline construction, when disputes arise with land owners regarding compensation.
  • When the state agency fines a company for failure to fulfill licensing conditions (e.g., minimum work program).
  • Obtaining permits for the construction and operation of an oil refinery.

Georgian Legislation and Regulations

The main regulatory document of the field is the Law of Georgia "On Oil and Gas", which establishes the principles of unified state regulation. Also important are the Law of Georgia "On Licenses and Permits" and the Law of Georgia "On Subsoil". When carrying out oil and gas operations, it is necessary to comply with the "National Regulations for Oil and Gas Operations", which approves technical and safety standards.

Additionally, in the case of international projects (e.g., Baku-Tbilisi-Ceyhan), relevant international treaties and Host Government Agreements (HGAs) have superior legal force and often stand above national legislation.

Service Delivery Process

  1. Due Diligence: Studying the existing license area, availability of geological data, and legal status.
  2. Strategy Development: Selecting the optimal legal structure (branch, subsidiary, joint venture) for the project.
  3. Documentation Preparation: Legal packaging of tender proposals, environmental reports, and technical projects.
  4. Negotiation: Agreeing on contract terms with the state.
  5. Operational Support: Ongoing legal support for daily activities (labor, tax, and administrative issues).

Why choose a specialist on Legal.ge?

Oil and gas law requires narrow specialization and deep industry knowledge. Legal.ge gives you access to lawyers who have experience in major energy projects and have worked on the side of both investors and state structures. Cooperating with us ensures the safety of your investment and full compliance with regulations.

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