Member Info for Looed

Agree Mole - I really hope for a change in tactic now. If GOGC are wrong on the Award, now is the time for Zaza to prove it. If the GOGC interpretation is more accurate, Zaza has played the politics game well and now is the time to grab the olive branch that is being handed to you and do the best deal you can.

Yes, first time I can recall seeing depth mentioned. I wonder if this is giving with one hand and taking back with the other.

No mention on the asset move - the statement references FRGC but not FRUS

Pt.2

We appeal to Frontera to take advantage of the goodwill shown by the Government of Georgia and to continue the extraction work on the development sites still in Soviet times, namely Mirzaani (17.2 km2), Taribani (17.66 km2), Patara Shirak (1.96 km2), Baida (3.71 km). ), Nazarlebi (0.49 km2) and Mtsarekhevi (1.59 km2) deposits (42.61 km2 in total, which is 0.84% ??of the total area (5060 km2) of Block XII), which are also limited in depth by the license.

"We also call on Frontera to respect and enforce the arbitral award, to fulfill all its financial obligations, first and foremost, to fulfill its social and responsible responsibilities," the State Oil and Gas Agency of Georgia said in a statement.

The Georgian government has decided not to terminate the contract with Frontera Resources Georgia Corporation and to allow the company to continue operating in one percent of the exploration area.

In addition, Frontera issued a statement on July 24 stating that the Georgian government was conducting a disinformation campaign against the company.

https://1tv.ge/news/saqartvelos-navtobisa-da-gazis-sakhelmwifo-saagento-kompania-fronteras-mimartavs-arbitradjis-gadawyvetileba-gaasajaroos/

(Thanks to DomFok, RogerA and JohnLogie for sharing. I am reposting under a more specific thread in case others miss it)

Pt.1

Georgian State Oil and Gas Agency appeals to Frontera to announce the arbitration award.

According to the agency, "If the company, despite numerous public statements made by the executive management, does not publish the arbitral award, the agency reserves the right to make the decision public."

According to the State Oil and Gas Agency of Georgia, the company "Frontera" issued an absolutely baseless and slanderous statement, the purpose of which, according to the agency, was to continue to distort reality and conceal the facts.

In addition, the agency calls on Frontera to enforce the arbitral award and pay off all financial obligations.

"As it is known to the public, on April 17, 2020, the International Arbitration Court made a final decision on the arbitration dispute initiated by the Georgian Oil and Gas Corporation and the LEPL State Oil and Gas Agency on January 15, 2018 in the Hague Permanent Arbitration Court. Georgia Corporation's failure to fulfill its obligations under the contract, thus establishing a substantial breach of contract by the company. This, in turn, gave the agency an unconditional right to terminate the contract. On April 27 this year, the State Oil and Gas Agency sent a notice to Frontera that its contract had been terminated. According to the contract, 90 days after the notification was sent, ie on July 27 of this year, the contract expired and, consequently, Frontera would no longer have the right to conduct oil and gas operations in the contract area, but based on the goodwill of the Georgian government, the decision was made. On the suspension of the termination of the contract.

We would like to remind you that this decision of the Georgian government was welcomed by the Ambassador of the United States of America Kelly Degnan.

Despite the goodwill of the state, the company "Frontera" issued an absolutely baseless and slanderous statement aimed at continuing to distort reality and conceal the facts.

The Agency remains committed to the decisions of the International Arbitration and the Government of Georgia and once again appeals to the company "Frontera" to publicize the decision of the Arbitration to prevent further insinuations. In the event that the Company, despite numerous public statements made by the Executive Management, does not make its own arbitral award, the above statements of the Company shall be deemed to be our consent, which is why the Agency reserves the right to make its decision public.

Mole - thanks for that as-always detailed response.

As you can see this is going to be one of those days where as soon as you post something its out of date!

I worry the GOGC statement will simply result in another round of "We won" and "they can't cancel" type comments that hinder the chances of constructive talks on how both parties go forward. It baffles me that they say "OK you can keep working" but seemingly won't agree to a meeting nor joint statement that would pave a positive way forward.

Pt.2

Giorgi Gakharia, Prime Minister of Georgia, - One percent, on which Georgia, legally, could have started the return process, refused to start this process and I will easily explain why. Because for us, in Georgia, today, the investment and business climate of the country is extremely important and we should not allow anyone, even by spreading false information, to question this investment environment and the business climate of the country. This one, the most important and the second - No one should be allowed to use the strategic partnership here for some purpose.

Giga Bokeria, Opposition MP - This is a political example of savagery. However, it is absolutely foolish and harmful for the country. First they created a whole scandal from this story, which has damaged the investment image of the country and everyone should understand that it does not only concern the interests of rich companies, but also ordinary, middle and poor classes, when the country has an image and when spending money here is risky. First they started this campaign, then they said that “We have won” and they had spent millions of our common money on this “win”, the money of taxpayers. Now, it turns out that they have to retreat, but they also retreat in such a way that the problem is not solved until the end. In other words, only the Ivanishvili regime can do so much nonsense and harm together.

https://www.youtube.com/watch?v=VLAJf7zoTeU

Too many posts at once - will try again !

Pt.1

J1 - American energy company Frontera calls on the Georgian government to stop its disinformation campaign. The company responded to a government statement issued yesterday stating that it would not cancel its contract with Frontera. According to the company, the government statement was packed with slanderous and false statements aimed at insidiously obstructing the inflow of foreign direct investment from the United States. Frontera clarifies that there was never any legal basis for the unilateral termination of the contract.

FRR Statement - “The Government of Georgia continued a public disinformation campaign regarding its contract with our company and the results of the recent arbitration action that the government initiated against us in 2018. We call on the Prime Ministre and his government to please stop this intentionally deceptive, damaging and disingenuous practice and, instead, engage honestly with the public and directly with our company to advance a true spirit of substantive partnership.

After years of commercially debilitating threats and harassment to the contrary, officials suddenly announced in the media that “the government had decided not to cancel our contract”. This announcement was wrapped in a litany of slanderous statements that served only to defame the character of our company and advance false statements about the work.

We wish to once again be clear that no legal basis has ever existed for the unilateral cancellation of our contract. The Government of Georgia`s continued insinuation to the contrary is wrong and amounts to intentional harassment.

Since April of this year, we have requested numerous meetings with the Government of Georgia. All of these requests have either been rejected or ignored. Now, senior officials make a public announcement without making any effort to constructively meet with our company. This is not normal behavior when it comes to working with the largest provate-sector U.S. investor in Georgia.

J1 - Responding to “Frontera's” statement, the Prime Minister of Georgia, Giorgi Gakharia, stated that the country's business environment is important and no one should be allowed to question the investment environment and business climate by spreading false information. The opposition accuses the government of damaging the country's investment climate and says that the extension of the agreement with “Frontera” is the result of international pressure.

Pt.1

WhamBoy - I want to hear the FRR response. If you look at the FRR website it seems to infer that 80Km2 is the whole area and they have only developed part of that - "The Taribani field is a large under-developed oil field covering an area of approximately 80 km2 (potentially 800 km2) on the southern side of Block 12. Productive zones are situated in the Miocene and Pliocene aged sandstone reservoirs"

The FRR website hasn't been extensively updated for ages, possibly years.

Interesting that GOGC again demand the Award be released.

Right after posting I see others have shared the latest GOGC statement which would indicate we have kept 1% in total.

Zeps - don't worry, we are all a bit confused!

Whilst Zaza has said all along that the Govt version is wrong, he did say that FRR agreed to return the undeveloped land and that seems to have happened around end May. The GOGC claimed that was 99% of the contested area and Zaza never put a % figure on that. I think most of us where relieved that we must have kept the 1% which we assumed was the land FRR was already developing. Then the GOGC tried to terminate the whole PSA meaning FRR appeared to lose everything (and that should have happened today) but that termination was recently cancelled.

The last GOGC statement (as my post earlier) says developed lands where never part of the arbitration which we took to mean the 1%, but the actual size has never been confirmed. Welloiled thinks we could have been working on up to 20% of the original area (if my reading of his post is correct).

Zaza has remained adamant that Govt interpretation of the Award is wrong, but posters here, myself included, for a time accepted the GOGC statements regarding percentages involved - we kept 1% and they get 99% of the Block.

I might be wrong, but I now think we have a yet to be determined % of the block that was never part of the Arbitration and we got 1% of the undeveloped land with the remaining 99% of the undeveloped / contested land going back to GOGC. For me its not clear what overall % of B12 that represents.

Hope that makes sense and it is just a theory.

GOGC claim material breach as a right to cancel the whole PSA which no longer seems to be happening. If Zaza is right, they had no legal basis to do so, its all been just talk. Recent actions would seem to back Zaza up on this.

Sorry Zeps and hope this doesn't make it even more confusing!

Mole - I found these comments in an earlier translation that I think compliment the later comments in translation 18 about work being / not being done. He is responding to the invitation to meet by the DM -

Zaza - We first heard in the press that they wanted to meet, but it is unclear what the purpose of all this is because in the same address they continued to spread false information about the results of international arbitration, our activities and the contractual obligations under which we work. If they think that they are expropriating our investments, then we will find ourselves in a different reality, but they do not have the right to do so by law and contractually. So it is still unclear what they are asking for because we are still working. We have not stopped working for a minute, although we have reduced the volume / scale of work due to these current events, but we have not stopped. And, legally, they can't stop on 27 either. The main demand they had was that we be fined more than $ 100 million, which the arbitration did not satisfy, and they also wanted to cancel the contract for us, and the arbitration also refused. But what the arbitration has imposed us is to return the areas where we do not extract oil and gas to the agency again, and we did that about a month ago.

The translator hopes to complete these tomorrow at the latest.

Sorry, some words are missing from the end of Zaza's last comment. It should read -

Therefore, it is a direct attempt of expropriation, which is called deprivation in human language, and this is exactly what the government is trying to do.

Journalist - What does the state want from you?

Zaza - Their main demand was that the company be charged about 320 million GEL in favor of the state, as if due to violation of the terms of the contract, which the arbitral tribunal did not satisfy ...

J - And what you did not do according to the contract?

Zaza - Which was not satisfied by the court. They also wanted to terminate the contract with us because they demanded payment. This, too, was not satisfied by the court. Only 2 out of 14 requests were satisfied. 1 of these 2 ...

J - Which are these 2 demands?

Zaza - One of these two is paying a fee of about $ 200,000 in advance, which we had been paying for for 23 years, and even now we're glad to pay it and we were ready and we didn't even argue about it. That was first and the other demand which was satisfied is that in the areas where we do not carry out oil and gas extraction works, should be returned back to the state, which we have also done and returned.

J - So what's the problem? If you win the main lawsuit and you have nothing left, then what do you dispute with the state?

Zaza - We are not arguing anything, the state itself is arguing with us here, as I told you, since 2013.

J - I understand and as you say this argument was concluded with you victory in arbitrary court, right? Then what is it? What are we talking about then?

Zaza - We are talking about the fact that the representatives of the government are coming out and claiming that they have won, which is completely illegal ...

J - What they are demanding? They say that they won and what should you do? They want you to leave?

Zaza - First of all, they claim to be black on white, like they have won and secondly, completely illegally, are publicly claiming that we should terminate the contract in accordance with the decision of the arbitral tribunal, which is not true. Because...

J - That is, the main thing is that they demand the termination of the contract and you say that it is not written in this decision.

Zaza - Yes, neither in the decision nor in the contract.

Journalist - When you say that you offered the public announcement of the decision – why do you refuse to make it public separately or jointly?

Zaza - It is probably best to ask them why they say no. For exactly the same reason, perhaps, why in one speech they say that all these 14 demands were met by the court, in the second speech they say that part ...

J - No, the main thing here is, as I understand it, the requirement to terminate the contract. Is this requirement met? And should you return the lands or not?

Zaza - We do not own land. We have the right to conduct oil exploration and extraction operations. As the arbitration has decided, we have already returned the territories where we do not carry out these works to the state. So this issue is closed. Now, according to the arbitral decision, they have no right to cancel the contract. Therefore, it is a direct attempt

Morning Gipps51 / Bezzy / CF73 - B-2-O did keep saying all the info was in the public domain and eventually shared his proof which was one part of a newspaper article. I recall more chat with him along the lines of "wait, that's it?" type of thing. He pivoted to all the info was too sensitive to share. I bet if even a much respected poster like Mole claimed "problem solved" in a couple of sentences many would push for more info and for him to go into as much detail as possible on why he would make such a claim.

You would think there would be a pretty major paper trail of non-payments and other obstacles preventing FRR from working. Maybe the publication of such is still a hand that he can play if matters remain unresolved. I can't think of any other reason why you wouldn't publish. Maybe the same reason the purported "smoking gun" hasn't been revealed in the Hope case, it can cause damage even before its published.

What a strange day - The termination has been cancelled yet all the termination statements remain on the GOGC website. In all the translations, certainly the more recent ones, I don't think we ever heard anyone speak from the GOGC, its all ministerial level.

Cancelling the termination is one (big) thing, but its the ability to actually crack on and restart production that needs to be sorted and we don't see much talk yet around this.

Hopefully we have a very interesting day ahead of us.

Welloiled - the only time I have seen "2022" mentioned was in a statement on the GOGC website from Hogan Lovells 22/05 -

“I am unaware till nowadays, whether they intended to return the exploration area after 2022."

Other statements on the GOGC homepage and in the press seemed to imply that the termination was for the whole PSA area, but then on the 28th May, the last published statement by the GOGC ended with this -

..."the original PSC had a 10-year exploration period that was extended twice to a total of 20 years, which expired in November 2017, thus triggering FRGC’s obligations to relinquish the exploration territories located outside the existing Exploitation/Development Area. The allegations as if SAOG and GOGC were eager to take control of these exploration territories are thus nonsensical.

Re-reading this with the benefit of recent translations and our discussions gives me a new way of looking at this. A dodgy theory given the multiple statements about cancelling the whole contract from the Govt side, but here goes -

If I read Welloiled estimates right then the developed areas could be up to approx 20%. if the last GOGC statement is correct, then these areas where never part of the Arbitration.

So, the Arbitration was for the remaining approx 80%, which was 100% of the undeveloped land.

Of this 80%, the GOGC claim the Award returns 99% to the GOGC and FRR retain 1% (in addition to the developed lands not in dispute)

Back to the head scratching statement by Zaza - "He publicly states that as if 99% remains with the state and 1% with the company. Which does not correspond to reality. In fact, it is the opposite. 1% remains for Georgia, which was returned by Mr. Gakharia and his government, 99% remains for the company."

If Zaza is right and the Award found mostly in FRR favour, then maybe the Award (so this assumes the one we saw is a fake) only awarded a small portion of the land to be returned to the GOGC. - the 1% that Zaza mentions. The GOGC then seized on material breach (we still don't know if true or not) to make a land grab for the remaining uncontested land still held by FRR.

I am thinking it aligns with his earlier comments that the State cannot cancel or take back lands without FRR consent. Zaza had said in earlier interviews that some land had been returned but wouldn't be drawn on the areas or the percentage.

Hope Zaza can clarify soon.

Our translator has found two recent news items that are Govt reactions to the latest official statement by FRR. Speakers include the Prime Minister and various officials and experts though no Zaza. Its possible some of the comments are similar to previous translations as we have seen both sides do like to stick to the same talking points, but we might be lucky and get some clarification on the 99% issue and contract length.

After these are completed, we will assume we now know the latest GD position in full and will focus on new projects that include comments or interviews with Zaza. Though as always with FRR, things can change at a rapid rate.

Here are the clips

Translation #21 TVKavkasia, PM and others, 3m55s, 24/07, https://www.youtube.com/watch?v=VLAJf7zoTeU

Translation #22, 1TV, Kelly Duggan and others, 7m7s, https://1tv.ge/video/fronteras-ganckhadeba-da-politikuri-shefasebebi/

The translator will confirm later today when they will be completed.

A few reports are applying a bit of spin by claiming that although the Appropiations Bill has passed the House of Representatives, the White House opposes the legislation. https://civil.ge/archives/360432

The White House objections cover many specifics of a very large Bill that typically don't reflect Republican values. As far as I can tell the parts related to Georgia are uncontested. Tussling between the Democratic wing and the Republican led Senate and Executive Branch are pretty routine so I wouldn't get too concerned by this. The fact the Executive Branch are already involving themselves here IMO shows they support this aspect of the Bill and is in line with the Republican view on policy re Georgia.

Seingred - yes, just trying to wrap my head around the logic of it. The wording used by Hope in the court submissions seemed to cover any director regardless of the act being litigated. I will try to do more digging.

Sorry should be formatted this way -

J1 - But where are these supplies? Why is there no extraction and so on? If we have any

Zaza - How does it not happen? Extraction takes place. We have been very successful in drilling and testing. As soon as we decided to go to the stage of large-scale development of these mines, it was from here that very big problems began, which continue to this day. And these are the problems, starting from the revocation of the license and the contract ...

J1 - And where is this oil reserve in Georgia?

Zaza - It is located in South Kakheti - Dedoplistskaro and Sagarejo district.