Russian crude producer to develop Abkhazia's offshore fields

SUKHUM, May 26 (RIA Novosti) - Rosneft plans to start work on oil and gas prospecting off Abkhazia, the head of Russia's largest state-run oil company said on Tuesday.

Sergei Bogdanchikov and Abkhaz Economics Minister Kristina Ozgan signed a five-year framework agreement in Abkhazia's capital of Sukhum earlier in the day that will see the company explore and develop the republic's offshore fields.

Bogdanchikov assured reporters that Rosneft was not coming to the Abkhaz market to "snatch business from anyone."

"We are coming here to develop the economy. There is a mild tax climate here, which is essential for business," he said.

Rosneft has further plans to build filling stations and supply gas, diesel fuel and lubricants to the former Georgian republic.

For this purpose, two companies will be set up in Abkhazia, one handling offshore operations, and the other selling oil on the Abkhaz market, the Rosneft head said.

He said the offshore oil project, to be developed in line with international standards, would neither harm the republic's environment nor scare off Russian tourists.

Bogdanchikov said Rosneft was planning to start drilling operations off the Black Sea town of Tuapse in 2010.

In turn, Abkhazia's economics minister said the republic remained a risk zone.

Russia recognized Abkhazia and another Georgian territory, South Ossetia, as independent states almost three weeks after Georgia's August 8, 2008 attack on Tskhinval, the South Ossetian capital.

"Rosneft is a serious company known the world over, and its arrival in the Abkhaz economy will create a favorable investment image for the republic," the country's economics minister said.