5.625
%
Neutral
35
mm boe
40
%
Our key concerns are the integrity of the government and the uneven application of the rule of law, which have intensified since the disputed 2024 election. The Georgian Dream government's crackdown on protests, its foreign-agent laws and the freezing of EU accession have isolated it from Western partners, although the hydrocarbon law itself is reasonably clear. Outlook amended from Neutral because democratic backsliding and Western sanctions on officials have materially raised political risk. Outlook: Uncertain. Risk premia unchanged at 5.625%.
October 7, 2026
Former Soviet Union
mm bbl
bcf
Southwestern Asia, bordering the Black Sea, between Turkey and Russia, with a sliver of land north of the Caucasus extending into Europe.
PSC/PSA
Early agreements in Georgia were Joint Ventures under royalty/tax fiscal terms, but all contracts are now Production Sharing Contracts (PSCs). Existing PSC terms and conditions, in particular, profit splits, vary from contract to contract depending on when and how they were negotiated. Under the terms of the PSC, costs are recovered, and profits are allocated on a conventional fixed production-sharing basis. In recent contracts, the only Government take is through the profit split calculation, as taxes are generally paid by the Georgian Oil and Gas Corporation (“GOGC”) through its share of profit oil.
Since the disputed October 2024 election, the Georgian Dream government has suspended EU accession talks, cracked down on protests and passed restrictive 'foreign agent' laws, drawing US and UK sanctions on officials. US and UK guidance cite a liberal tax and investment regime, but note eroding judicial independence and growing political risk. Georgia is a key transit corridor for the BTC oil pipeline and the South Caucasus gas pipeline, while domestic oil production is minimal.
Source: ESRI, Heritage Index, HMG Foreign & Commonwealth Office, US Department of State, International Trade Administration, International Law Review, Ernst & Young, Wood Makenzie & OGA data.
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