London South East | The UK's favourite investor portal.

Posted by Looed on the 28th April :-

From Zaza's interview of 3rd March 2020
I have cherrypicked the main points in light if the "we mostly won and yet continue to be slightly vague" nature of the GOGC statement. Anything in CAPS is mine.

1- One of the main causes of the dispute is the licensing area - the state says Frontera should give up 99 percent of its contract, and the US company insists the government is depriving it of resource-rich territory. SEEMS A WIN FOR GOGC

2- According to Frontera, the amount of investment made in Georgia since 1997 has reached $ 580 million, with the state claiming to be several hundred million less." TRIBUNAL SEEMS TO HAVE REJECTED FRR CLAIMS

3- We very much hope that the arbitration will make a fair decision....and have never violated any of our contract terms. AS ABOVE, SEEMS TRIBUNAL REJECTED FRR CLAIMS

4- We have always wanted to come to an agreement, as this would prevent all parties from spending a great deal of money during the arbitration process. FRR TO REPAY FUNDS TO GOGC AND REIMBURSE COSTS

5- Unfortunately, the process that we thought was going to reach an agreement did not end in a meaningful way. There is no negotiation on the agreement at this stage. Extensive negotiations with the government have been going on for about six months, and we have agreed on the issues to be discussed. The state expressed a desire to have a greater economic interest in this agreement, and we were ready to do so.
Finally, whatever issues arose in the light of the existing agreement, I am sure It seems that their actions were not sincere. There were issues that were not on the agenda. They sought to amend the various clauses in the contract so that it radically changed the economic interest of the company in the contract. When you invest more than half a billion and then fundamentally want the state to change the economic terms of this contract, it is very difficult and virtually impossible to work in such a situation. FRR CLAIMS REJECTED, TRIBUNAL "MOSTLY" SIDED WITH GOGC, TO WHAT EXTENT REMAINS TO BE SEEN.

And from an interview 14th Feb 2020

6-The court hearings were held in London, awaiting a ruling. We do not know when. We expect to be positive in that we do not have, and we know that we have never had nearly $ 70- $ 80 million in debt - IS THIS THE MINERAL USE TAX THAT FRR NEED TO REPAY? WHY DO FRR NEED TO PAY THIS TAX?

Posted by Chris572 on the 2th April :-

New one from today, don’t think there much new stuff
https://tbilisipost.ge/news/saqartvelos-mtavrobam-amerikuli-kompania-rontera-esources-s-saertashoriso-saarbitrazho-sasamartloshi--tsardgenili-sarchelebis-umravlesoba-mougo/1161

Posted by bugsy-b on the 27th April :-

Usaid, Georgia post
?????????? despite the fact that the government has changed everyone's working mode, we continue working on important energy reform with the government of Georgia We are making energy security and independence of Georgia.We have started online training on the rules on the government, economy and sustainable development of the ministry of Parliament, economy and sustainable development of the ministry of Parliament, economy and sustainable development For Representatives, for those who are making reform within the new law of energy.--The COVID-19 pandemic is changing the way we work, but it’s not reducing our support for Georgia’s energy security and self-reliance. We continue to partner with the Government of Georgia on important energy reforms. We launched a series of remotely delivered Regulatory Impact Assessment (RIA) training courses to help employees of the Parliament of Georgia, the Ministry of Economy and Sustainable Development, and other energy institutions implement reforms under the new Energy Law.ISET - International School of EconomicsUSAID Energy ProgramUS Embassy Tbilisi, Georgia??????????? ??????????????????? ?? ??????? ???????????? ????????????????????? ??????????“We continue working on important energy reform with the government of Georgia, we are making energy security and independence of Georgia”... food for thought.. If FRR had just been stuffed in Arb, would they be making announcements like this ?.. The plot thickens..

Posted by erazzel on the 27th April :-

Yes because of the pipeline....

Posted by bugsy-b on the 27th April :-

erazzel, Not sure there.. The pipeline brings Georgia "energy security", this is different to "energy independence"..

Posted by Seagull4Trawler on the 26th April :-

Taribani: Frontera's Last Case
It looks like most of us are clinging to the hope that we've still got Taribani covering the 1% of B12 which makes some sense until you consider the Gas production at Mtsarekhevi (MGC) ; Frontera is selling MGC produced Natural gas through Georgia’s gas distribution grid. This must make up additional % however if we are talking about Production v Exploration it may actually mean that both Taribani and MGC are considered production areas and we've effectively lost 99% of the area not in production. As to the reasons why the arbitration GOGC may have been fed up with the slow progress but I wonder if the real target was sunk costs which need to be absorbed before they receive payment on the PSA; by removing the 99% any money that was spent there may now be discounted in the sunk cost equations which may mean $100Million + of the $500 Million spent. That we ceased production was in my belief to stop Hope/ Outriders snatching that money before the asset was moved and the before new production licenses can be drawn up under the new offshoot the arbitration case had to be concluded. As stated here the Arbitration is made of many rulings; GOGC have won the overwhelming majority but critically Frontera also won some also hence the need for Arbitration in the first case. The mineral license tax issue is interesting as if Frontera now go bust then the GOGC wont get a bean so it's in their interest to allow Frontera to progress with development if only in order to redeem the tax and then start paying into the PSA. The remainder of B12 is now highly prospective acreage that can be farmed out again by GOGC. If Frontera now fail it will knock Georgia's business rating form 44th in the World to sub corruption category 179th place. How could anyone even consider investing in country that want you to spend the money to find oil and gas and then snatch it back when you find it; that is what has happened here make no mistake. Frontera had to wait years for GOGC to allow them to sell MSG gas and then at only a restricted volume ( I suspect this where we won in Arbitration). It's painful to watch this unfold; it reads like a Dallas V Barnes plot only we've no idea who JR is. I sincerely hope we come through this ; there are some notable posters who have been absent of late and I will keep reading these boards hopeful that more light can be shone on the Arbitration findings in due course. I can't see this uncertainty lasting beyond June so lets hope for the best!

Posted by Ivyspivey on the 24th April :-

Georgia's Oil Co. Prevails In Contract Fight With Frontera
Law360 (April 23, 2020, 6:11 PM EDT) -- The country of Georgia's state-owned oil and gas company says it has prevailed in arbitration involving the Texas-based Frontera Resources following a dispute that arose out of a 1997 production-sharing contract.

JSC Georgian Oil and Gas Corp. said Tuesday that on April 17 a tribunal upheld its interpretation of an underlying contract, at the same time also upholding the majority of its claims brought against Frontera Resources Georgia Corp. and Frontera Resources US LLC.

The arbitration had also involved LEPL State Agency of Oil and Gas of Georgia alongside Georgian Oil and Gas.

The tribunal concluded in the proceeding that Frontera Resources Georgia had materially breached the contract by refusing to relinquish the exploration area — the location of which wasn't described in the statement — back to the Georgian state, Georgian Oil and Gas said.

The award obligates Frontera Resources Georgia and Frontera Resources US to reimburse the amount of mineral usage tax that Georgia Oil and Gas had paid on the Georgian unit's behalf, as well as the costs incurred in the proceeding by Georgian Oil and Gas and LEPL State Agency of Oil and Gas of Georgia. Counterclaims asserted by Frontera Resources were dismissed, according to the statement. The company did not provide specific numbers.

"Currently, JSC Georgian Oil and Gas Corporation and LEPL State Agency of Oil and Gas of Georgia are considering further steps aimed at enforcement of the award and implementation of the rights and remedies granted under the contract," Georgia Oil and Gas said.

Additional details about the award were not immediately available on Thursday. According to local Georgian news reports, an arbitration initiated by Georgian Oil and Gas Corporation and State Agency of Oil and Gas had to do with unpaid salaries to Frontera’s Georgian employees. It’s unclear whether the April 17 award relates to that proceeding.

Representatives for Frontera, which says it operates in emerging markets in Eastern Europe around the Black Sea, could not immediately be reached for comment on Thursday.

Frontera is among six investors carrying out oil production activities in Georgia, according to Georgia Oil and Gas. Frontera says that the "core" of its operations efforts is focused in Georgia, where it holds a license for an oil block in the upper Kura basin. The Kura is a river that drains into the Caspian Sea via Azerbaijan.

Frontera was mentioned by name in a letter sent by U.S. Congressman Markwayne Mullin, R-Okla., to Georgian officials earlier this year, in which he expressed "increasing concern regarding Georgia's continued decline from democratic values and the associated decay of its economic prosperity."

Posted by DevonianExile on the 24th April :-

RE: Fshg
Just for the record:
- we have repeatedly tried to engage in communication with Zaza and the company
- we said from the outset that we would only communicate tangible news received from the company
- not a single FSHG communication has been even been acknowledged by the Company
- we have not had one single piece of any information - let alone privileged information
- we have in the last 24 hours sent a request for an update in the light of the news re the arbitration process
- FSHG was not set up as an action group - simply a body of shareholders trying to engage collectively and objectively with the company. Thus far we have failed.
- FRR has no interests or assets in the UK, and is no longer covered by the requirements of the FCA. We have been informally advised that any levered approaches need to be in the Caymans, the US or in Georgia.

Basic facts of life I'm afraid - and I think most of the team have moved on regarding their involvement. Last word from me unless we actually get a response from the company

Posted by Contra on the 24th April :-

Maybe the way to go is to raise this with the US Senators who were/are supporting Frontera, and copy in the American Ambassador to Georgia. Frontera after all is a US company. If it is not behaving properly it brings discredit on the US and its activities in Georgia.

Posted by Looed on the 24th April :-

Contra just a word of caution - US senators will not communicate nor represent anyone outside their congressional district. Also, they are being paid to lobby for FRR. I think its fine to post on their twitter feeds etc so others can see and hopefully react, but I doubt the senators themselves will get involved or reply. The Embassy might reply so could be worth a shot.

Having said that its surprising there hasn't been any comment from the senators etc so far.

Posted by Madpunter on the 24th April :-

Looed - It wouldn't be surprising if there was no comment from the senators, if a deal was being negotiated with by FRR and it could be compromised.

Posted by Looed on the 23rd April :-

The GOGC statement in Georgian maybe slightly different ?
The GOGC site has the statement available in Georgian. With the proviso that I used Google Translate and it might be pointless nit-picking, the statement is below. This version claims the GOGC won the "absolute majority of their claims" and "The Arbitration Tribunal also upheld the claims of Frontera Riverside Georgia Corporation and Frontera USA and demanded that the proceedings be adjourned" The demand that proceedings be adjourned isn't in the english version. Who demanded the adjournment - FRR?

Here is the statement -

On April 17, 2020, the International Arbitration Tribunal, on the one hand, on the final disputes between JSC Georgian Oil and Gas Corporation and the State Oil and Gas Agency, and on the other hand between Frontera Risorz Georgia Corporation and Frontera USA. A decision was made to share the products of June 25, 1997 I. The distribution and study of the processing plant is based on the contract.

The Arbitration Tribunal supported the interpretation of the norms of the contract by JSC Georgian Oil and Gas Corporation and the State Agency for Oil and Gas LEPL and satisfied the absolute majority of their claims.

Among other things, the Arbitration Tribunal ruled that the Frontera Risorz Georgia Corporation had substantially violated the contract, which was a refusal to return the search area (99% of the entire licensed area) to the state.

According to the decision, Frontera was instructed to reimburse the fee paid by the JSC Georgian Oil and Gas Corporation for the use of natural resources and also to reimburse the plaintiffs for the costs of arbitration proceedings. The Arbitration Tribunal also upheld the claims of Frontera Riverside Georgia Corporation and Frontera USA and demanded that the proceedings be adjourned. According to the contract, the decision of the arbitral tribunal is final.

Currently, JSC Georgian Oil and Gas Corporation and LEPL State Oil and Gas Agency are considering further steps to implement the decision taken by the Arbitration Tribunal and the implementation of other rights granted by the contract.

Source -https://www.gogc.ge/ka/article/frontera-gogc-the-international-arbitration-tribunal-rendered-its-final-award-/479

Posted by Looed on the 23rd April :-

A couple of Russian articles
Basically a rehash of the GOGC statement -

"Georgia wins arbitration dispute with US company Frontera

Georgia’s Oil and Gas Corporation and the State Oil and Gas Agency won a lawsuit against Frontera.

According to the corporation, on April 17, 2020, the International Arbitration Court made a final decision on controversial issues between, on the one hand, Georgian Oil and Gas Corporation JSC and the State Oil and Gas Agency, and on the other hand, Frontera Riverside Georgia Corporation and Frontera USA ”, which is based on the contract of June 25, 1997 on the partial distribution of products and the study of the processing plant.

The Arbitration Court upheld the interpretation of the contractual norms of JSC "Oil and Gas Corporation of Georgia" and the State Oil and Gas Agency, and satisfied the vast majority of their claims.

Along with other issues, the arbitral tribunal ruled that the Frontera risorize Georgia corporation substantially violated the contract, which was reflected in the refusal to return to the state the search area (99% of the entire licensed area) of gas deposits.

According to the decision, Frontera was instructed to reimburse the payment paid by JSC "Georgian Oil and Gas Corporation" for the use of natural resources, as well as to reimburse the costs incurred by the plaintiffs during the arbitration. The arbitral tribunal also satisfied the mediation of Frontera Resources Georgia Corporation and Frontera USA regarding the enforcement of claims and, due to these claims, ceased production. According to the agreement, the decision of the arbitral tribunal is final.

Currently, the Georgian Oil and Gas Corporation and the state oil and gas agency are discussing further steps to implement the decision made by the arbitration tribunal and to implement other rights granted by the agreement."

Source - http://bizzone.info/energy/2020/1587605429.php

There is a second one that is very similar to this article here - https://rossaprimavera.ru/news/3cf0987d

Posted by Oopsi on the 22nd April :-

Clear as mud
The press release from the GOGC is as clear as mud. It is impossible to tell the complete legal position without sight of the FULL judgment. What we have been shown in essence is a bald man professing to a have a full head of hair which may be no more than a comb over.

I must be barking mad but my heart didn’t sink after reading the GOGC press release. If it was a complete victory, rest assured the press release would have been a lot more euphoric in my view. It didn’t appear to be.

I never expected anything other than the GOGC obtaining a successful award. The writing was on the wall for that in the way the parties behaved during the arbitration and the rhetoric after it. The question was always what the award would be. The press release doesn’t scream a resounding victory. For example:

“satisfied a vast majority of the claims raised by JSC Georgian Oil and Gas Corporation and LEPL State Agency of Oil and Gas of Georgia" – not all then. What wasn’t satisfied?

Yes there appears to be a finding of a material breach. There are many breaches which can be found but the key question is ALWAYS what damage is caused by the breach. The award says FRR are “obligated to reimburse the amount of the mineral usage tax payed by JSC Georgian Oil and Gas Corporation on behalf of Frontera Resources Georgia Corporation as well as the costs incurred by the claimants with regard to the arbitration proceedings.”. So that’s tax and the costs. No award returning the 99%, or other huge damages sum. If that was part of the award, wouldn’t that have been the headline grabber?

The final paragraph of the press release it interesting. It makes a distinction between enforcement of the award and the implementation of the rights and remedies under the contract. The award, as far as I can tell based on the press release only, is for reimbursement of the tax and costs. I have no idea how much that sum is and if FRR are in a position to pay that. That is fairly straight forward to enforce. The second part relates to the rights and remedies under the contract and the impact that a finding of material breach may have on these rights and remedies. These rights and remedies, if available under the contract, DO NOT APPEAR (and we have no way of knowing without the full judgment) to have been exercised by the arbitrators and I expect the GOGC thought they would. The award has meant that the GOGC may need to take this step unilaterally and I bet they are currently taking legal advice on that.

Latest Share Chat

Member Info for Madpunter

Followers

Following

Posts (Last 30 Days)

Posts (All Time)

Last Post

Member Since

Share Chat Post Distribution (Last 30 Days)

Activity Log (Last 30 Days)

Latest Share Chat

Member Info for Madpunter

Followers

Following

Posts (Last 30 Days)

Posts (All Time)

Last Post

Member Since

Share Chat Post Distribution (Last 30 Days)

Activity Log (Last 30 Days)

Please enter at least 2 characters

No results found

Search results

Recently viewed

Trending