https://formulanews.ge/News/3395523 Jul 2020 13:24
The government will no longer cancel the contract of the American fuel company "Frontera Resources Georgia Corporation", according to the Ministry of Economy and Sustainable Development.
The Ministry of Economy's contract with Frontera was due to be canceled on July 27. After winning a dispute in the arbitral tribunal, the government notified the American company of the decision to terminate the contract on April 27.
"The Georgian government has decided not to terminate its contract with Frontera and to allow the company to resume operations in the part of the original contract area where oil production has been under way since the Soviet era," the ministry said in a statement.
According to the Ministry, the decision was made to maintain the international reputation of the country in terms of investment environment.
„ It is unequivocally unfortunate for us that someone in America's highly diverse political spectrum has an excuse to use this absolutely routine commercial dispute to the detriment of the strategic relationship between our countries," the ministry said in a statement.
The decision to terminate the contract with Frontera was followed by critical letters from a number of congressmen and senators to the government.
On May 16, six senators and congressmen, including Senator Ted Cruz, wrote a letter to US Secretary of State Mike Pompeo and Treasury Secretary Stephen Mnunich discussing the harassment of American businesses by the Georgian government.
" Frontera was recently subject to extremely restrictive regulations, and now the company is threatened with expropriation by the Georgian authorities. In 2019, another American company, Conti Group, was expelled from the Anaklia Port construction consortium in exactly the same way, as a result of which the project was suspended.
These complications and disputes are significantly offset by geopolitical implications. "Frontera's energy-generating activities were aimed at making Georgia more stable and energy-independent," the senators and congressmen wrote.
Earlier, on February 12, another congressman, Randy Weber, wrote a critical letter to the Georgian government.
Weber wrote that calls for sanctions had increased in Congress because of problems with Georgia's democratic institutions and government interference with foreign companies.
"The decline in foreign direct investment is not surprising, as such an environment is extremely unfavorable and restrictive for European and American business interests.
They cancel contracts and carry out expropriation attacks on them. "A good example of this from my native Texas is the experience of the oil and gas company, 'Frontera Resource,'" Weber wrote.
The members of the ruling team have been particularly aggressive in their rhetoric towards Frontera over the past year, with some linking statements by congressmen and senators to lobbyists hired by Frontera.