Georgian gov’t decides not to terminate contract with American oil and gas company Frontera
The Georgian government has decided not to terminate a contract with oil and gas exploration company to Frontera Resources, following a decision by the Hague Arbitration Court which would have allowed Georgia to terminate the contract on July 27.
The Georgian government will allow the American company to continue searching for oil in one percent of the territory it was initially given, since Frontera has already returned about 99 percent of this territory to the state by the decision of the arbitration court.
A special statement from the Georgian government says that in litigation with Frontera, the Georgian side is undoubtedly right, which has been confirmed by the decision of the Hague court, however, in order to avoid misinterpretations that could cast a shadow on the investment climate of Georgia and its business reputation, it was decided to allow the company to continue to work.
The Georgian Ministry of Economy invited Frontera to continue its work after a group of American senators wrote a letter to Secretary of State Michael Pompeo, in which they claimed the interests of Western business in Georgia were being infringed upon.
Frontera has been conducting oil and gas search operations in Georgia since 1997.
Over the years, the company has repeatedly announced the discovery of large gas reserves, but in reality this has not been confirmed.
The Georgian government claims that litigation with the company ended in its favor. Frontera says otherwise.
At the same time, the court verdict has not yet been made public – Frontera opposes this, but the Georgian government encourages the verdict to be made public.
Georgia says that according to the Hague Arbitration Court’s decision, on July 27 the contract with Frontera was to be terminated and the company should have paid about $6 million.