US Ambassador: Entry of Russia's United Energy Systems and Gazprom not a blow to Georgian-US relations

The inflow of Russian energy money into the Georgian market does not signify a change in Tbilisi's relations with the West in favor of its neighbor to the north, Richard Miles, the US ambassador to Georgia, said on Rustavi 2 television. 'The presence of Russia's United Energy Systems and Gazprom in Georgia has not hurt Georgian-US relations,' he added.

In early August, UES acquired a 75% share in the Tbilisi energy distributor, AES-TELASI, which for five years had belonged to AES, a US energy company. Miles expressed regret that his countrymen would be leaving Georgia but underscored that the change was 'dictated exclusively by business considerations and not politics: TELASI has experienced some financial losses, and there have been mistakes by management.' The Georgian side agreed that there had been a series of errors. In the ambassador's view, UES was the only serious contender to buy TELASI. He expressed confidence that the Russian firm would be successful in Georgia and said it might even succeed in lowering the cost of electricity.

Miles wished UES and, in particular, Anatoly Chubais success in Georgia. As for Gazprom, there have always been concerns about the Russian company's plans to turn over the major gas pipelines to Georgia. But, in the view of the ambassador, the text of the signed agreement on cooperation between Georgia and Gazprom has dispelled all such doubts. Thus, the US and Ambassador Miles have completely changed their view of Georgia-Russia cooperation on energy matters.

Heretofore, Washington has categorically opposed such cooperation, a view more than once publicly stated by Steven Mann, the US president's adviser on energy matters, and other US officials. Despite the departure of AES from Georgia-in Miles' words, the company was 'the standard bearer of Western investment in Georgia'-US business remains interested in staying in Georgia and has, in fact, been broadening its field of operations. Specifically, the oil company Frontera, which has been active in eastern Georgia for more than five years, has decided on a new project in which it will invest $70 million in further oil explorations and exploitation.

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