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. Last Updated: 07/27/2016

U.S. Firm's Oil Rig Unveiled in Georgia

TBILISI, Georgia -- Georgian and U.S. officials unveiled Tuesday an oil rig built by a U.S.-based company in the republic's mountainous east. President Eduard Shevardnadze and U.S. Ambassador Kenneth Yalowitz went to Dedopli-Tskaroi, located in the Caucasus Mountains in eastern Georgia, to open the pilot oil rig, built by the Houston, Texas-based Frontera Resources Corp.

Frontera had signed a production-sharing agreement with Tbilisi to search for oil in eastern Georgia and spent some $30 million to build the rig, which is set to start producing oil next March. It has a planned capacity of 150 tons a day.

"It is very important for Georgia to explore its oil resources to satisfy domestic needs," Shevardnadze said at the rig's opening.

Lamiri Sanikidze, deputy head of the Georgian State Oil Co., said potential oil resources in eastern Georgia could be as high as 600 million metric tons.

Georgia recently signed a multinational agreement to take part in the building of a U.S.-backed oil pipeline from the Caspian Sea port of Baku, Azerbaijan, through Georgia and across Turkey to the Mediterranean Sea. The U.S. government is a major supporter of the project and is seeking to increase U.S. influence in the region.