Rattled Caspian energy investors likely to sit tight

LONDON (Reuters) – Conflict in Georgia has shaken but is unlikely to scare off investors in the region, drawn by its energy resources and vital oil and gas links to the West.

Analysts agree that while the dispute has had a limited impact on the price of oil and gas, investors will be more nervous about investing in the Caspian region, questioning its reputation as means of reducing exposure to Russia.

“Situations like this lead to a general sense of instability and so I think investors will have to weigh-up chances of continuing problems in the region going forward,” Jeffrey Woodruff, Senior Director in Energy, Utilities and Regulation at Fitch Ratings said.

Fitch downgraded Georgia to B+ with a negative outlook last week when Georgia launched an offensive against separatists in the breakaway region of South Ossetia.

Reuters UK