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

Posted by Looed on the 24th Feb :-

Pt.2

Recall that in the last two months, letters sent to the Georgian government by US congressmen have raised concerns about ongoing events, dissolution of rallies, the fall of the proportional system, and the persecution of opposition politicians, suggesting that the partnership between Georgia and the United States may be in question.

Malin drafted the Georgia Fair Business Practices Act in 2019, but his fellow congressmen began supporting the act more than a year ago. The Republican congressman expresses his concern over the country's deviation from the country's democratic values ??and economic deterioration. One example of business harassment is cited by oil and gas company Frontera Resources, which is suing Georgia for international arbitration.

Source - https://commersant.ge/ge/post/biznesi-ashsh-sgan-sanqciebs-gamoricxavs (in Georgian)

Posted by Looed on the 24th Feb :-

Article on sanctions
FFR and Cocoa Cola Georgia - what a strange ****tail! Pt.1

"Imposing sanctions, whatever the form, will certainly affect the economy and will be a very undesirable and dangerous fact. But, I don't think that will happen, I'm sure. We have an association agreement and visa-free travel with the European Union, and it would be very bad for any member of the government or any citizen to impose sanctions on us during this period. That is why we should all work to prevent this, both from the position and from the opposition. ”- Lasha Papashvili, CEO of Redix Group, appreciates the US congressmen's opinion on imposing sanctions on Georgia.
The US Congressman, Republican Party member Charles Fleischman, recently joined the sanctions on Georgia. He is the fifth US lawmaker to back Congressman Marquin Malin's initiative.
Republican Marquin Malin, a member of the US House of Representatives, sent a letter to Georgian Prime Minister Giorgi Gakharia, expressing concern over deviating from democratic values ??and worsening economic conditions.
Kommersant wonders what Georgian business expects from Georgia's strategic partner and whether the US may impose sanctions on certain individuals in Georgia. As it turns out, most businessmen unanimously deny the threat of economic sanctions from the United States, though with the slightest assumption, this could have a significant impact on Georgia's international image.
“This is not about sanctions against the country, but about sanctions on people. Anyway, I think there will be no sanctions, and it all looks like Bodova. Sanctions are imposed on countries whose policies are contrary to US strategic interests. These are Iran, Russia - we are not included in this list. Consequently, we cannot compare all this with the Georgian economy. In Russia, the US has imposed sanctions on individuals and some companies, while state sanctions are only imposed on Iran (movement, transfers prohibited).
If this happens, it will be a long-term problem for our country in the reputable part and it will take years for it to recover. The Congressman's letter is a work of lobbying and such people do not want good for the country, ” said businessman Irakli Iashvili.

Temur Chkonia, president of Coca-Cola Bottlers Georgia, the largest US-based Coca-Cola company in Georgia, believes that such conversations would not be harmful to the economy from a strategic partner, and it is possible that the US would impose economic sanctions.

"When one country imposes sanctions on another, it means that the state or business must react. The purpose of the sanction is that a topic that is of concern to any state agency should be subject to regulation. It is possible that the US will impose economic sanctions on Georgia. Even one congressman says that it is enough for the majority to share, but it will not hurt the economy, ” said Temur Chkonia.

Posted by Looed on the 24th Feb :-

Pt.2

Co-founder of Georgia's TBC Bank, Mamuka Khazaradze—who has served as the ADC investment’s high-profile backer through consortium member TBC Holding—has blamed Bidzina Ivanishvili, the billionaire oligarch and Georgian Dream leader, for disrupting ADC’s project. Georgian prosecutors last year started investigations into alleged money laundering involving Khazaradze and another co-founder of TBC, Badri Japaridze, focusing on transactions that took place some 12 years ago. Khazaradze, who like Japaridze strenuously rejects the laundering allegations, has lately set up a new political vehicle, the Lelo Public Movement.
By their actions, wittingly or not, officials have certainly sent the message that people associated with ADC are not in favour with the powers that be. Was that the reason why ADC failed to hit financing deadlines for Anaklia?
The government insists it has been entirely fair. Officials point out they gave additional time to ADC to fulfil its contractual obligations, but the consortium failed to replenish its capital with $120mn by finding a strategic investor to replace the US Conti Group, which pulled out from the project last year. ADC also failed to attract a $400mn loan from international banks, they added.

All is to play for. If Georgian Dream is toppled by opposition parties in the general election, ADC might conceivably get a second chance to realise its Anaklia project. Political landscape changes could consolidate the confidence of foreign investors which seem to be shying away from the project under uncertain political circumstances.
Levan Akhvlediani, ADC’s CEO, has, meanwhile, stated that the consortium plans to take the government to the international courts over the termination of the contract.

Strong words from Pompeo
The initiative to build a deep sea port at Anaklia, located just a few kilometres from the Russian-occupied Abkhazia breakaway territory, appears to still enjoy strong backing from the US. In June last year, US Secretary of State Mike Pompeo said following a meeting with Mamuka Bakhtadze, then Georgia’s prime minister, that “[Anaklia deep sea port] project and others will enhance Georgia’s relationship with free economies and prevent Georgia from falling prey to Russian or Chinese economic influence. Those pretended friends do not have Georgia’s best interests at heart.”

The Kremlin is undoubtedly keeping up efforts to prevent Georgia on its doorstep from falling into a Western-orientated orbit, but it does not make public statements on Anaklia.
The imperative of achieving sufficient maritime economic development in the Black Sea region partly to service growing trade flows between Central Asia and Europe is, however, clear. Russia, for instance, recently announced it intends to build a deep sea port at Taman, on the Kerch Strait.

Posted by Looed on the 24th Feb :-

"Torpedoed. Georgia’s government knocks out consortium contracted to build Anaklia deep sea port but
No mention of FRR but lots of parallels with our current situation. Pt.1

"Though Georgia’s government has torpedoed the consortium it asked to build a $2.5bn flagship deep-sea port on the Black Sea coast, there are few politicians in the small country that would openly declare that the long prized infrastructure ambition should be dropped—especially with the Georgian general election coming up later this year.
The prospect of building the port not only helps spread the feelgood factor among Georgians wanting affirmation that their country at the crossroads of Europe and Asia has solid economic growth prospects. It also helps to symbolise the desire among many in Georgia to move closer to the West, while limiting Russian and Chinese influence in their country—Tbilisi in 2016 very pointedly granted the right to build the deep-water facility to US-backed investors.
For now, ruling coalition and opposition parties are lobbing brickbats at each other over why it was that in January officials went ahead and terminated the government’s public private partnership (PPP) contract with the Anaklia Development Consortium (ADC). Although Georgian Minister of Economy and Sustainable Development Natia Turnava has moved relatively quickly to announce that a new tender for the development of the deep-sea port will materialise “very soon”, it seems unlikely that anything much will be settled until a new government is voted in an election that must take place by October. More likely is that the squabbling politicians will spend the time in the runup to voting day attempting to kick lumps out of each other in trying to pin the blame for the ADC disappointment.
The decision to announce a new tender “was absolutely logical, as Anaklia is our priority and we cannot allow any further delays,” said Turnava. She added: “The Ministry of Infrastructure, with our involvement, will review the terms and conditions, as they have undergone considerable modification since 2017 in favour of the investor. We are very hopeful that a new company will soon emerge as a result of a transparent tender. Of course, the Anaklia port will be built, this is our strategic priority and nothing will hinder it."

Dark mutterings
There are dark mutterings that the reason ADC did not get anywhere fast in progressing the project, and eventually had the project taken away from it, is that figures in the ruling Georgian Dream party want to see the contract for the big investment go to favoured and powerful business interests. Even darker mutterings suggest that efforts are under way to endlessly stall the project at Moscow’s behest, but there is only scarce and inconclusive evidence for the first conspiracy theory and hardly anything at all to put forward for the second.

Posted by Looed on the 21st Feb :-

Article - Is economic freedom in Georgia under threat?
This article is from 24th Jan but I don't think has been shared (apologies if it already has). It draws together the Georgian political climate, the Anaklia Port sage as well as FRR. Nothing new but an easy-read summary of events. I have only cut & pasted the part directly related to FRR (though there is a couple more references in the article -

“The Georgian government’s decision to suspend the construction contract with the Anaklia Development Consortium, in which Conti Group was a member, is definitely an alarming signal in terms of economic freedom in Georgia,” Givi Gigitashvili, a Research Assistant for the Caucasus and the Digital Forensic Research Lab of the Atlantic Council, tells Emerging Europe, adding that the available evidence seems to suggest that cancelling the contract with the ADC was a politically motivated decision about a project, with such decisions “indeed damaging the foreign investment climate in Georgia.”

At the same time, the latest edition of the World Bank’s Doing Business Report says that Georgia is by far the best performer in emerging Europe when it comes to the ease of doing business, with the country ranked seventh of 190 countries.

Mr Gigitashvili says that some Georgian Dream MPs have acknowledged that the project was shut down due to potential threats coming from Russia should construction be completed.

“For the first time in the history of an independent Georgia, our government sabotaged the accomplishment of a large-scale strategic project, which was openly backed by the US government. Regrettably, the fact that the Russian factor played an important role sends a negative signal not only to investors, but to Georgia’s friends in the US and the EU about the country’s reliability as a strategic partner,” he stresses.

Discussing potential sanctions put forward by Congressman Mullin, he believes that the bill, which was introduced over Frontera’s legal dispute with the Georgian authorities, would not gain enough support in the US Congress as it lacks the sufficient number of sponsors. However, the very existence of this bill “is already damaging the country’s image” and gaining more support will likely depend on the final decision taken by the arbitration court in the Hague.
“The fact that arbitration proceedings are pending at an international court gives hope that the decision will be objective,” he says, noting that “it is hard to discuss what impact it can have on bilateral relations between Georgia and the US before the court’s verdict is announced.”

Source - https://emerging-europe.com/news/is-economic-freedom-in-georgia-under-threat/

Posted by Looed on the 21st Feb :-

Article in Russian on USA - Georgia relations
FRR gets a name-check in this long article (in which Russia claims no interest in Georgia!). This is the last part of the article -

"So are there really threats to the power of Bidzina Ivanishvili from without, if so, of what character? Since there is a controversial opinion among ordinary people that the power that Americans support comes to power in Georgia, naturally, the statements of the West have formed a feeling among the population that they no longer support the ruling force and that it is no longer worth voting for it. This may become a factor that will work against Ivanishvili, the electorate will not vote for his party, “Georgian Dream,” and even its own team will no longer rig the election, said Nodar Kharshiladze.

As for Russia, the creature of which is allegedly Ivanishvili, Georgia is already not of interest to her; now Moscow has other, more ambitious goals of a global nature. And in Georgia, the Kremlin has already fulfilled its tasks - it did not allow its entry into NATO and tied it economically, Moscow does not pursue other goals in Georgia, so they will not fight for Ivanishvili.

But how, then, does Ivanishvili intend to maintain power? Again, the old method will be launched - bribing voters, I am sure Kharshiladze: “There are intentions to announce a debt vacation, but this time absolutely all loans for the year will be paid, not only problem ones. Moreover, as it turned out, he paid them not from his own pocket, but from the state budget, i.e. again from the pocket of the people. But this is the only front in which he has at least some hope of winning; Ivanishvili is losing the rest. Neither political technologies nor fake technologies can save the election campaign of the ruling authorities, all the more so since the trump card on the side of the opposition is Nino Burjanadze, who is the only person in Georgia who directly faces Putin. Well, it’s impossible to discount Saakashvili, who periodically inflicts effective attacks on the Georgian authorities. ”

Source - https://zerkalo.az/zagranitsa-ivanishvili-ne-pomozhet/

Posted by Blownitalready on the 20th Feb :-

BP in Georgia
The parties discussed the large-scale projects implemented by BP in Georgia and the prospects of strategic cooperation under the new head of the corporation with a renewed mission. The focus was on the favorable investment environment in the country and the long-term successful cooperation of the British company with Georgia.

During his meeting with George Gakharia, Gary Jones focused on completing the South Caucasus pipeline activities and completing the key phase of the Shah Deniz project development phase, which will enable the first flow of natural gas from the Caucasus to Europe via Georgia by the end of this year.

The representative of the International Corporation underlined the important role of Georgia in the successful implementation of this project, which is actively supported by both the US Government and the European Union. There was also talk of renovating several sections of the pipeline, which was carried out with the active involvement of the Georgian government.

Giorgi Gakharia introduced Gary Jones to the Government's vision on the importance of Georgia's regional transit function and spoke about the country's needs for energy security. The Prime Minister pledged support for BP as part of ongoing work and future cooperation.

For his part, the company representative expressed readiness to discuss directions and opportunities for future cooperation with Georgia.

The sides also discussed the future plans of BP. The company plans to significantly reduce CO2 emissions in its current operations, both in energy extraction and supply operations.

It has been argued that the company's transformation process could be of significant benefit to Georgia, especially as BP's interest in the region, including in Georgia, increases in renewable energy production.

British company BP first came to Georgia in 1996 and is now one of the largest investors in the country.

Beka Liluashvili, Prime Minister's adviser on economic affairs, attended the meeting at the government administration.

https://ipress.ge/new/premieri-british-petroleum-is-regionul-prezidents-azerbaijanshi-saqarthvelosa-da-thurqethshi-gari-jonss-shekhvda/

Posted by Looed on the 20th Feb :-

Article - "The importance of energy and natural resources matters in arbitration"
This is from 2018 but its comments seem highly relevant today, I am only posting part of the article as quite long-

"According to the 2016 ICSID caseload statistics report, 26 per cent of currently registered cases are related to disputes in the oil, gas and mining sectors.[2] Similarly, a look at the ICC caseload data reveals that the energy sector made up the largest segment of arbitrations in 2014, comprising 18.6 per cent of the entire ICC caseload in that year.[3] It is no coincidence that about one-quarter of total treaty and commercial arbitration cases are related to energy and natural resources. These sectors share at least two key economic attributes that make them susceptible to disputes: their output prices are subject to substantial volatility and their investments soon become sunk (i.e., cannot be easily moved to alternative uses). These features make energy and natural resources assets particularly vulnerable to opportunism, where the parties with an economic stake in their generation of profits (private or public) are likely to seek to change terms to their favour.

When market prices of natural resources change dramatically, parties that are involved in long-term contracts might have strong incentives to renegotiate – and when renegotiation is not viable or feasible, disputes arise. The increased volatility in commodity prices that started in 2003, for example, illustrates why so many crude oil, natural gas and gold mining arrangements agreed upon prior to this point in time are ending up in renegotiation, mediation, arbitration or litigation.[4]
The likelihood for price renegotiation and changes in the regulatory regime is high in energy and natural resource projects given the high capital investment necessary to develop reserves and unleash production. Once the exploration risks have been overcome and the associated investment costs have been sunk, governments may be tempted to act opportunistically, knowing that investors cannot move their sunk assets to alternative uses.[6] Under these circumstances, sovereigns may attempt to increase their ‘government take’ on natural resources, either through increasing taxation, royalties, fees, rights and duties by altering the pre-existing profit-sharing or revenue-sharing agreements with the private sector, or by demanding that private companies relinquish shareholdings in their companies to the state or to a state-owned oil company.[7] Similarly, private parties may renege to their obligations if deemed to have become too onerous. Disputes among shareholders will equally become more likely given that the volatility of prices may alter the initial allocation of risks between partners in ways that were unforeseen or unexpected.

Source - https://globalarbitrationreview.com/chapter/1177439/damages-in-energy-and-natural-resources-arbitrations

Posted by Looed on the 20th Feb :-

Russian article - update on Dolphin
The Dolphin site on the Black Sea shelf will be divided into several lots - Orzhel

The Dolphin hydrocarbon section on the Black Sea shelf, the PSA competition for which is scheduled to be announced in March 2020, can be put up in several lots.

This was announced by Minister of Energy and Environmental Protection Alexei Orzhel.

“We hope to break it into three or four lots. This is a great investment project. We will ask the president and prime minister to help us, we will travel, attract investors, ”he said at a meeting of the relevant parliamentary committee on Wednesday, presenting a report on the first half of the work of the Ministry of Energy and Energy.

According to him, the ministry has already held a series of consultations with international experts, as well as companies that might be interested in the competition.

“We have already held negotiations with SOCAR and other companies so that the maximum number of large companies will participate in Dolphin,” the minister said.

Commenting on the nine competitions held last year, Orgel noted that the process of preparing for the signing of agreements is currently ongoing.

“In the near future, we hope that with the two players we will already sign the first production sharing agreements,” he said.

As reported, on April 12, 2019, the Cabinet of Ministers announced a tender for the development of hydrocarbons within the Dolphin section on the Black Sea shelf under PSA conditions. Four companies applied for participation: the American Trident Acquisitions Corp, the American Frontera Resources Corporation, which owns the initiative to develop the Dolphin site for PSAs controlled by the State Oil Company of the Republic of Azerbaijan (SOCAR) Caspian Drilling International Ltd. and one of the largest private gas producing companies in Ukraine, Ukrnaftoburinnya.

On July 27, 2019, the then Prime Minister of Ukraine Volodymyr Groysman announced his intention to invite the Cabinet to consider the possibility of announcing a new tender for the development of the Dolphin hydrocarbon section. His initiative was supported by Alexander Danilyuk, who at that time held the post of Secretary of the National Security and Defense Council of Ukraine.

In September, the Cabinet of Ministers canceled its decision to launch the PSA contest for the offshore section “Dolphin.

Source -https://oilpoint.com.ua/uchastok-delfin-na-chernomorskom-shelfe-razobyut-na-neskolko-lotov-orzhel/

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