A phantom refinery: How Georgia helps Putin bypass oil sanctions

Corruption researcher Besik Donadze told The Insider that Black Sea Petroleum appears to be more of a Russian business than a Georgian one. “[The owners] did not make their money in Georgia. They made it in Russia, brought it to Georgia, and started a business,” he said. Donadze also noted that the refinery project, which had remained on the drawing board for about 10 years, moved forward rapidly once it became a priority. “Obtaining licenses and construction permits, it all went very quickly,” he added.

At the presentation of the refinery project, Asatiani herself acknowledged that, “This achievement would have been impossible without effective work and significant support from the government, as well as the participation of state and local institutions.”

Anti-corruption researchers in Georgia also note that the construction of the Black Sea Petroleum refinery is clearly in the interests of Georgia’s ruling elite. The level of investment needed for the first stage of construction was estimated at $110 million, while the overall project budget was put at $700 million. Financing involved the Georgia Development Fund and several commercial banks, including Cartu Bank, which previously belonged to Georgian Dream party founder Ivanishvili.

“The Georgia Development Fund is a private fund controlled by the government. It invests in sectors that the government believes need stimulation. That means the prime minister signed the decision to invest in Kulevi. In other words, the government cannot say this is an exclusively private initiative,” said Sandro Kevkhishvili, a program manager at Transparency International Georgia.

Commenting on Cartu Bank’s participation in the project, Kevkhishvili noted that after U.S. sanctions were imposed on Ivanishvili in 2024, the bank’s shares were redistributed. Formally, the billionaire’s son, Uta Ivanishvili, remained the owner of 35% of the shares, while the other shareholders were not disclosed. But in the expert’s view, “control over the brand remains,” and “given his de facto control over the ruling party, it can be said that Ivanishvili has a personal interest in the project’s success.”

Donadze also pointed out that Georgian Economy and Sustainable Development Minister Levan Davitashvili, who took part in approving the refinery project, resigned in 2025. Soon after, he became chairman of Black Sea Petroleum’s supervisory board.

Donadze said he is certain that building the refinery in Kulevi primarily serves Russia’s interests, but that carrying out such operations in Georgia would have been impossible “if there were no interest from Ivanishvili’s team.”