Regulators from both countries met in a three-day seminar this week to learn about US practices and see oil drilling platforms off the California coastline, ironically an area where offshore drilling has been brought to a halt by strong community and environmental opposition. The Black Sea offshore Georgia holds an estimated 120million tonnes (864 million barrels) of recoverable oil reserves, officials say, and the country has auctioned off several oil development leases to foreign firms.

Companies holding leases for oil development in Georgia include: Anadarko Corp., Houston-based Frontera Resources Corp. and British explorer Ramco Energy.

Initial wells are due to be drilled in 2002.

"We want to create an atmosphere that is inviting to foreign companies," said the head environment and safety supervisor for Georgia's oil and gas regulatory body, Merab Abesadze, speaking in Russian through a translator.Georgia, which has been torn by Russia's war with rebels in the Caucasus territory of Chechnya and conflict with its own rebel Abkhazia region, is viewed as strategically important not only for its own Black Sea oil, but also as a route along a US-supported pipeline that would carry Caspian oil. The Clinton administration is supporting a $2.4 billion, 1,080-mile pipeline to transport Caspian oil through the former Soviet republics of Azerbaijan and Georgia to Turkey, avoiding routes through Russia or Iran.

The US Department of Interior funded the training project, and officials say it aims to ensure safe operation and close ties with Georgia after years of lax Soviet exploration.

"One of the main areas of focus is that the pipeline come out of the region and not be subject to disruption, because not all of the countries surrounding the pipeline are favourable to US policy," said Carol Hartgin, director of the international activity in marine minerals for the US Department of the Interior's Minerals Management Service (MMS). Officials also want to ensure that the former Soviet states aim for cleaner oil operations than under the U.S.S.R.

"We have to be sensitive in offshore drilling in the Black Sea because we have a number of nature preserves so we are very concerned with protecting the environment," Abesadze said.

The fledgling Georgia regulatory agency has been in operation for just 6 months, and is looking to add offshore development to its portfolio of onshore exploration. MMS inspectors detailed US environmental and safety practices that included extended visits to California offshore oil platforms. Meanwhile, California and US officials are looking at ways to shut down old oil platforms off the California coast.

A moratorium on new leases and drilling have prevented the state's offshore drilling industry from tapping an estimated one billion barrels contained in undeveloped offshore leases. Californians have been particularly averse to offshore drilling, saying the platforms are unsightly, hamper the tourism industry and pose a threat of oil spills.

-- (Reuters)