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Pt.7

Journalist - That is, it all started then. However, it was not widely publicized at the time.

Zaza - Not publicized. Because then they tried and kept it confidential. In 2018, the United States Legislation even recorded for the first time in the history of Georgia-US relations, I will try to quote, „hostility to American investment is growing, especially in the oil and gas sector, which opposes Georgia's energy independence and promotes Russia's interests“. That’s what I’m telling you about.

I understand that the Georgian government has only recently managed to create such an image for Frontera, since you work in such a field that you do not have a customer like any other company can have. They are virtually unfamiliar with your business and have recently started talking about it. It is good to speak about your problems in public. However, I would like to take the time to ask you how you can imagine continuing this situation. You often talk about context and you don't have to worry about putting something in context. In this context, let us ask you: We remember the statements of the US government regarding the Port of Anaklia - experts, various groups called on the Georgian authorities not to turn down the Anaklia Port project, but they did eventually. In your case, how do you see the sequel? This is also a very important political context for all this, the elections, Ivanishvili's prospects, etc. In this context, please tell us how you and the Georgian government are imagining the struggle and we must end our conversation.

It is no coincidence that a year ago, a bill was introduced in the United States called the Sanctions Act for Fair Business Practice in Georgia. When it comes to Anaklia, whether it's „Frontera“, „Iconia Capital“ or various companies who have a problem, all the American investment that is under this pressure and operates in an unfair environment, members of the current or former government who are violating these agreements, will be those objects that could potentially be sanctioned.

For example, what scale figures could these be? You know. Could he be, for example, Deputy Minister of Economy? Could it be a higher rank person or Bidzina Ivanishvili personally?

The legislation of the United States defines all this in such a way that it can be the former Prime Minister, the current Deputy Minister, and so on. This bill applies to members of current and former members of any position.

Those are persons who have caused problems for American companies.

Yes. Day by day this resolution became bipartisan. And the number of people joining this resolution is growing day by day.

Pt.6

Journalist - And your company has followed this vector change in your perception, as I see it. Because here you are also pointing out that the preferred conditions for gas imports that were given to Gazprom and SOCAR. And the Georgian government was negotiating with the Iranian government over gas imports. Interestingly, here’s the spirit of this letter very much echoing the spirit of the report and the letter that you have now mentioned. Are you the first source of this information or, conversely, are the sources those letters and reports that exist in America? That’s what I wanted to clarify. In this letter, you also talk about Gakharia's speech at the Georgia-Iran Business Forum in Tbilisi in 2017, where he said that Iranian investments have increased by 657%. Because of this, the topic has already been opened that Gakharia is also referred to as the lobbist of Iranian business in Georgia, which is not good for him at all, not only in the eyes of Americans. That is why they often accuse the Frontera of lobbying for certain topics, leading it to the US Congress in such a way. Let's explain this mechanism. What is the source of your allegations? Your impression, your feeling, your information or American sources?

Zaza - Here is this last letter, a letter from Senators Cruz and Cornyn, where we were cited as one of the largest American investors in the country. And, for that very reason, we were quoted in this letter. Members of the Georgian government have begun to speak out against the fact that "Frontera" is behind this letter, as well as behind other letters.

But is there a dose of truth here? If you just give them this information and then they check, naturally, you won't believe it, will you?

First of all, as far as information is concerned, since 1997, when we started working and investing in Georgia, we have been constantly meeting with the United States government in Washington, and not just in Washington. Since this was one of the large-scale projects, it started in 1997 and continues to this day because the potential that we have found and what we have discovered is very large for the country. Therefore, our work has always been closely monitored, but for some reason everyone forgot that in 2016, in this context, as mentioned in this letter, for example, Mr. Ivanishvili's relations with Russia and their interest in Georgia, Congressman Steve Russell addressed the Congress in 2016 with exactly the same context. So that then neither the "Frontera"`s arbitration ...

Remind me if you can in detail what you mean by "same context"?

It was an absolutely identical context that Ivanishvili is in close contact with the Russian government and, in the interest of the Russian government, is trying to influence the institutions, strengthen his government and destabilize the country. This was happening 4 years ago, in 2016. In 2017, the Prime Minister, Kvirikashvili, had a lot of communication. Some letters were signed by 15 c

Pt.5

Journalist - They probably don’t know that American Congressmen could lose everything in life because of this if they were noticed in this type of lobbying and could end up in a very big scandal.

Zaza - And, that’s exactly the problem. Here are people who don't even understand such elementary issues and don't even want to look at it and find out the detailed terms of the contract, in the sense that "now we have to stop the contract", "We couldn't do it in court?" Then let's try to use force. ”That's the problem.

Let’s assume that somehow the sharp criticism that the government has received from the West has cut it, and presumably it will no longer dare to force you to stop. Don’t you have the feeling that something has gone wrong? This issue is so politicized in the context of international politics, that it will probably have to give up power. Don’t you have that feeling?

Here is the issue. For this answer I will use the letter which was sent by senators Cruz and Cornyn and congressmen Markwayne Mullin and Judie Arington to State secretary and also Minister of Finance of USA. In the letter, one of the sentences was that "Mr. Ivanishvili and his government are cooperating with rivals and enemies of the United States, and this is at the expense of America's geopolitical and commercial interests." In addition, just a week ago, if I am not mistaken, the Republican Committee, which includes 147 members of Congress, also mentioned Mr. Ivanishvili in the National Security Report, who is destabilizing Georgia in the interests of Russia. These people, and these institutions in the United States, have a lot more information than me and our company management. Now, if we put in this context the story of what is happening to us after 2013, I think we can very well find the key to why all this is happening.

You wrote a rather harsh letter to Gakharia. Here I have this letter. Steve Nicandros, Chairman of the Board of Directors of “Frontera Resources”, and you wrote a very scathing letter directly stating that "since 2013, we have seen growing anti-American sentiment and discriminatory attitudes toward important US investments and NGOs." Let's clarify one thing before we continue talking about this particular letter, what do you mean by the growth of anti-American sentiment? From the government or the general population? Is the anti-American sentiment growing among the population of Georgia?

We can't see. It doesn't look like that from our point of view. On the contrary.

I still can't see it and, therefore, I want to clarify what you mean by anti-American sentiment. From the government?

From the authorities, yes. On the contrary, over the years we have seen growing interest and growing support among the population. There is a growing aspiration in the western direction, in terms of values, business, education, etc. But on the government side, we have seen since 2013 that this vector is changing and has changed radically over the

Pt.4

Journalist - What a strange dead-end, I am trying to figure out with you the next steps.

Zaza - I’ll tell you what to do now in a minute because there’s no dead end. It says in the resolution that we have the right to continue, the contract says that we have the right to continue for many more years, just the government, which has been trying for the last 7 years to somehow terminate this agreement, tried in court, tried different methods. It did not work. And, the last thing they have left, is to try to do it by force. So there is no legal solution for them here anymore. They tried everything and did not succeed.

Can a forceful method be to send people to stop you physically?

Of course. For example, our employees and we are no longer allowed to do so, for example, operators are not allowed to continue drilling, extraction work, and so we are no longer allowed back to our investments.

However, it is difficult to imagine how this could actually happen, because of "Frontera" case which is, I think, one of the most painful for this government. In fact, the entire US Congress has been declared the lobbyist of the Frontera. And, if the Frontera is so strong, in their view, in principle, we know that the system doesn't work that way. But But in the understanding of our government, the lobbyist of "Frontera" is the whole Congress with its Chairman of its Foreign Affairs Committee., isn't it? In that case, how much risk do they take to carry out such an act and force the American company out of Georgia?

I think the problem is that our government is working in a different sense. Not on the condition that we have negotiated with the state for years and it is detailed in the agreement, not on the condition that it was determined by the international arbitration, where we were sued and, by the way, we did not even appear at the trial. The arbitral tribunal declared the other party in absentia as a loser. Well, that's the decent thing to do, and it should end there. By the way, it should be emphasized that all this has been added ... You have just mentioned that our government is no longer reluctant to curse the people in the United States who are expressing support for the growth of investments, the economic strengthening of Georgia, the political strengthening of Georgia. Now, the deputy parliament chairman said that they are lobbyists…

Could you please remind me that.

This was Mr. Kuchava, if I am not mistaken.

Kuchava? Do you mean that legendary letter? No, no that`s different

The public is so misled that it seems like it is a normal, legitimate business for a congressman to take money and make a supportive statement in exchange for that money.

Pt.3

Journalist - Should be returned to the state. What percentage of these areas are there? Is it really 99% or very small? The talks were about 99%.

Zaza - They try to present it as 99%, but it is unclear how they report it or where it comes from. Anyway, all the areas where we are not doing this work, about 1 month ago, maybe more, 1.5 months ago, we have already returned to the state.

And, you don’t need these areas? You returned them because of the decision, right?

Yes. The decision was written that we have to return them. On the contrary, to be honest, the state should have asked us to keep these territories, because, for example, now there are no works in those areas, no investments are made and no people are employed. If we had kept these territories, now there would have been about 100 people working there. A search would be launched and if successful, we would have found more oil and gas in the area.

However, we know that state authorities say that you do not count the supplies, but the resources, and this is hypothetical, and in fact is that there are no supplies there. These are resources and therefore there are a lot of issues that you are constantly debating but the fact is that you really need to find some compromise. Can't it be like that? You read one decision in your own way, keep working, the state reads differently and thinks that the contract with you is practically terminated, right? So it turns out and they are going to terminate this contract. What should happen? How do you see this situation and what do you specifically demand if you can tell us?

Today, we made a public statement to the authorities, calling once again that neither by agreement, nor by the decision of the arbitral tribunal, nor by law, they have the right to unilaterally terminate the contract and no longer allow us to return to our investments and continue working. If they do it by force, it will be an expropriation, for example in Venezuela - Maduro is doing the same, or Putin is doing the same in Russia. Therefore, it is not legal. This will be a criminal act and today we once again publicly call on them not to do that ...

Or will they be forced to stop working? Is that how you see the situation? Or they will bering the executive and make you to stop the works/extraction or search work? I don't know exactly how this works. So, should they stop it?

The executive cannot be brought in because there is no such court decision. Even if there is a court decision relevant to this decision, the executive cannot be brought.

Pt.2

Journalist - What is this all about? In principle, you do not find it difficult to make political assessments. Your statements are very bold. There are political statements, practically. I don't think there's anything wrong with that. Take this assessment simply as my perception of the fact and its statement. I’m not saying something in context. Or what would it be? Isn't the process related to the fact that the Georgian government has pressure from the West, specifically from the United States - constant letters, a constant reminder that the American company is being harassed in Georgia. So did you have to? We know that, for example, the constitutional changes are because the government has somehow given us, the Georgian people, with the help of the West. Isn't Frontera the same story that they show Americans that they are ready to give up?

Zaza - I do not rule out that it is the result of this communication and this pressure that this step has been taken. It was as if some concessions had to be made. It was as if they wanted to consider some conditions. However, this is just a maneuver and another farce, the like of which we have seen many times in the past. And, the basis for this conclusion is that in the same statement they made yesterday, they continued the disinformation campaign, which has been going on for several months.

What you mean, specifically, is that you don’t meet the conditions, and so on. Do you mean that? What disinformation campaign are you referring to?

Because of the disinformation campaign that has been going on since the arbitral decision was published. It is because of this decision that the arbitral tribunal has not complied with their request to cancel the contract with us.

However, they say they have upheld the lawsuit. It is very interesting how the decision can be interpreted in such a way that the guilty verdict is satisfactory. Is such a thing possible at all? I do not know.

It is impossible. Such a thing does not happen, and especially at the level of arbitration of such a rank, when the decision on black and white is very clearly defined so that it leaves no room for speculation. But, nevertheless, they said ...

The Ministry of Economy reads that "the State Agency for oil and Gas Corporation has met the absolute majority of the interpretation of the contract norms and their claims." That's exactly what it's written about.
Can anyone draw any conclusions from this sentence? What does "interpretation of norms" mean? Arbitration ...

Looks like the oil and gas corporation interprets arbitral decision in its own way. It usually means that, doesn't it?

The Oil and Gas Corporation and the state, which was represented by the Ministry of Economy’s Oil and Gas Agency, had 14 claims against us. Of these 14 requests, 12 courts were not satisfied. Only 2 were satisfied. 1 of these 2 requirements is that the territories where we do not extract oil and gas should be returned to the state ...

(Apologies, this translation is a bit late as was due yesterday)

This was originally shown on TV Kavkasia, an opposition leaning channel

Pt.1

Journalist - In the first part of the show, we will talk about “Frontera”. A company that has become a very painful topic for the Georgian government, especially in terms of criticism from the American side about the government's crackdown on this company. In virtually every letter sent by the US Congressmen to the Georgian government, it is said that the Georgian government is harassing American interests and American business. For example, "Frontera" is always cited. Recently, more precisely yesterday, the Ministry of Economy announced that it is ready to resume negotiations with the company "Frontera", with which it intends to terminate the contract and find a compromise in order for the company to continue working in Georgia. How and in what form it is still unknown. In the first part of the program, Zaza Mamulaishvili, President of “Frontera”, will be our guest and we will talk about what happened after the announcement of the Ministry of Economy and whether any concrete steps have been taken to start these negotiations. Thank you Mr. Zaza for participating in the program. We know the official statement of the Ministry of Economy. The Deputy Minister of Economy said that they are ready to discuss the issues with your company and find such a compromise that it is possible to continue working on the mines owned by the company "Frontera" under certain conditions, of course, by receiving the appropriate guarantee from him. Did you have any specific, direct feedback from the Ministry of Economy? If you are planning a meeting or if you know what compromise can be talked about?

Zaza - Thank you so much for this opportunity. To be honest, we were a little surprised by such communication, especially when we were addressed in public about the meeting, and this was when we have signed the 1997 agreement with the state, we now have the exact terms and conditions for continuing to work on the fields that the Minister of Economy and his deputy referred to yesterday.

However, it has happened since you lost the dispute in the Arbitration Court, didn't you?

We have not lost the dispute

This is how it is interpreted. Let's talk about this as well, but before that what is the situation now? Did the Ministry of Economy contact you? Did they contact you directly?

We were addressed in public. We were directly contacted by the Deputy Minister last week that they wanted to make some commercial proposals, which ...

They wanted you to prepare the proposition?

No, they wanted to make a proposal for us, to which we agreed, of course, and said, “Yes, sir. As soon as you submit this proposal, we will be happy to meet you and discuss the details." But even after that, they did not submit a proposal, and to our surprise, they addressed us so publicly about the meeting yesterday

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