Bassett, S., and others, 2003, Ukraine—Selected Issues, IMF Country Report No. 03/173 (Washington: International Monetary Fund).
Davis, J.M., R. Ossowski, J. Daniel, and S. Barnett, 2001, Stabilization and Savings Funds for Nonrenewable Resources. Experience and Fiscal Policy Implications, IMF Occasional Paper 205 (Washington: International Monetary Fund).
Global Witness, 2004, Time For Transparency. Coming Clean on Oil, Mining and Gas Revenues; available via the Internet at www.globalwitness.org
Wakeman-Linn, J., P. Mathieu, and B. van Selm, 2003, “Oil Funds in Transition Economies,” in Fiscal Policy Formulation and Implementation in Oil-Producing Countries ed. by Davis, Ossowski, and Fedelino (Washington: International Monetary Fund).
We wish to thank the Georgian International Oil Corporation (GIOC) for providing data and comments on an earlier draft of this paper. Further comments by Paulo Neuhaus, seminar participants at IMF headquarters, and our editor, Esha Ray, are gratefully acknowledged.
Increased tanker traffic through the straits has led Turkey to tighten regulations, aiming to reduce environmental and safety risks. For example, since 1998, oil tankers have been banned from passing the straits at night.
In March 2004, Kazakhstan’s Deputy Minister of Energy, Mr. Kinov, announced that Kazakhstan was ready to deliver up to 150 million barrel per year for transport through BTC. These shipments could play an important role in making full use of BTC’s capacity in the next few years, before ACG production reaches it full potential (see Section III below).
The authorities indicate that all revenues from Baku-Supsa will be reported on GIOC’s website, www.gioc.ge.
Article 8 and Appendix 1 of the 2002 Host Government Agreement on the SCP Pipeline suggest that Georgia has a choice between receiving a cash transit fee of US$2.50 per tcm or receiving 5 percent of the gas transported through SCP. The two options would have equal value if all gas could be sold at US$50 per tcm without any storage or transaction costs. The cash option looks attractive given the poor payments discipline in Georgia’s domestic gas sector, but the Georgian authorities have agreed with the operators that Georgia will take gas as in-kind payment for gas transit because it will contribute to a diversification of Georgia’s sources of energy and because they are confident that payments discipline in the domestic gas sector will be improved.
The contracts pertaining to the South Caucasus Pipeline use the terms “Option Gas” for gas that is received as in-kind transit fee, and “Supplemental Gas” for additional Georgian purchases.