Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
The most important aspect of all these shenanigans is of course the arbitration so everything crossed for a successful outcome on that front. I remember Zaza allegedly mentioning mid Jan until the “crises” is over so maybe just a few more weeks until news breaks.
The drone strike has pushed the oil price up to close on $70.
Yes, very strange.
Not sure the report mentioned arbitration complete, more like Zaza said a five point plan had been agreed with the GG and only the length of time was outstanding. That's from memory and it is 72 years old!
Interesting recent reading on LSE - largely stemming from a Chris572 (Bugsy Mark 2 - and a great piece of super sleuthing) post yesterday:
…"It’s dated today and a pretty big Georgian article about FRR . Posted 10 hours ago
https://translate.googleusercontent.com/translate_c?depth=1&nv=1&rurl=translate.google.com&sl=auto&sp=nmt4&tl=en&u=https://batumelebi.netgazeti.ge/news/246134/&xid=17259,15700021,15700186,15700191,15700256,15700259,15700262,15700265,15700271,15700283&usg=ALkJrhjZXktVTBOvkCz3dyWlpI91oMYEEQ 4
…
Lots of further comment and you need to read the links from this article. Not great reading but of course takes a Georgian view of life, and does show that the process is being fought tooth and nail. My initial comments:
Well, arbitration is about judging the merits of two opposing views (mediation is about finding common ground). I would suggest/hope that there is merit in both views.
The fact that the process has been going on for so long is testimony to the determination of the FRR team - warts and all
Much of this stems back to the plans for commercial development logged in 2017. I recall SN talking about corruption around about that time at an Atlantic Council presentation - and I had similar very clear feedback in an informal conversation with the Nomad at the time (I did not share simply because it was informal - but frankly enough water has now gone under the bridge). Probably all linked and has created the entrenchment mentality that still clearly exists
As far is Hope is concerned this absolutely demonstrates that winning some form of outcome in the arbitration process is binary - lose and there is nothing left. Hope must know this - and that only ZM/SN can fight this battle. So I suspect the Hope issue is to all intents on the back burner until the arbitration process is completed
Hope chasing the asset - and the FRR response with the transfers - clearly has not helped the cause. whether fundamental or incidental we can’t tell
I see the parties have until February 2020 to place what looks like final responses. However the court will undoubtedly then take further time before making a judgement.
One can only assume that a deal/funding is lined up behind this process - otherwise why not just cave in. Again a bit of a binary outcome
Which brings us back to the politics (the US interests). Whilst the arbitration judges will not be influenced by politics you would assume that the behaviour of the two parties in the final arbitration stages will be influenced
So much for confidentiality of the arbitration process - the Georgians have clearly leaked with intent and purpose
My overall view - I just don’t know. But whatever - we remain spectators with a very limited view. However I think I do understand why the total shutdown on communications has been in place. When fighting this type of battle you can’t afford to trust anyone you do not have a deep relationship with.
Thanks guys for the 'News' despite the obvious bias contained within it. I am confused as to how to square it with the reported comments by Zaza that the only outstanding issue was the length of the PSA.
Merry Xmas to you too Fozzer.
The oil production figures I referenced in my last post were taken from Zaza in the Ukrainian article/interview, which you kindly posted on the 10th September under the ‘Black Sea Shelf - Dolphin area’ thread. I’ve copied below only the relevant portion on oil production.
"Co-owner of Frontera Zaza Mamulashvili: we understand why the Ukrainian government was critical of us - TUESDAY, SEPTEMBER 10, 2019 08:10 - DMITRY RYASNOY
• Is it true that Frontera produces about 2 thousand barrels per day?
• No, less. To two. In 2018, we produced about 500 thousand barrels (about 70 thousand tons. - EP ). It’s not about how many barrels. The fact is, for what period the production is designed. Will she stop in two months or in 20 years?
• What are the financial results of Frontera for 2018?
• Somewhere 1.2 million dollars in profit."
Also, 70,000 tons is around 490,000 barrels (1 ton = 7 barrels)
A Very Merry Christmas to all and a Prosperous New Year.
Interesting thought, if Gipps' estimate of 48b for b12 is near right that would be more than the US 2020 defence budget estimate of 38b, no wonder everyone wants a piece. I'm not going to say it, hell yes, you don't fight over an empty box, sorry Coggy. Merry Christmas to All LTHs.
The Foreign Ministers of Georgia, Azerbaijan and Turkey have made collective statements at the Ceremonial Palace of Georgia earlier today.
Prior to the pronouncements, Georgia, Azerbaijan, and Turkey authorized a joint proclamation of the eighth trilateral meeting of the foreign ministers in Tbilisi.
As Georgian FM Zalkaliani said, the sides assessed the progress in trilateral cooperation and discussed contemporary regional and global developments.
During the gathering, special notice was waged towards the discussion on cooperative transport-energy projects.
Views were exchanged on the significance of the realization of the Trans-Caspian Gas Pipeline (TCGP) project, as well as, the role of Georgia, Azerbaijan and Turkey in the transportation of the energy resources.
The sides expressed gratitude about the prosperous projects of Baku–Tbilisi–Ceyhan and Baku-Tbilisi-Erzurum (BTE).
Foreign ministers also conversed on the importance of the Trans-Anatolian Natural Gas Pipeline which connects Shah Deniz gas field in Azerbaijan to Europe through the South Caucasus Pipeline, TANAP and the Trans Adriatic Pipeline.
“Glad to host my friend and colleague Mevlut Cavusoglu in Tbilisi for trilateral meeting of [our nations]! Good discussion on how to strengthen strategic partnership, enhance political and economic cooperation between two countries.” David Zalkaliani wrote on Twitter.
By B.Alexishvili
23 December 2019 17:08
The US President Donald Trump signed the 2020 National Defense Authorization Act which states that the defense budget for the year 2020 will be $38 billion.
The document mentions Georgia as being a "valuable friend to the US" which has shown its commitment to the improvement of US-Georgia relations especially with its participation in NATO-led peacekeeping missions.
“Russia's violations of the sovereignty and territorial integrity of Georgia and Ukraine and its ongoing destabilizing and aggressive behavior, have undermined peace, security and stability in Europe and beyond", states the Bill.
Similarly, the US Congress restates US support to Georgia’s sovereignty and territorial integrity within its internationally recognized borders.
The Bill also underlines that Georgia and Ukraine are "allies and partners" of the US and NATO in Eastern Europe.
Creator of the bill Senator James Inhofe, who is also the Chairman of the Senate Armed Services Committee, released a statement saying the bill will "build a stronger, safer America and keep us ahead of our strategic competitors: China and Russia".
“President Trump has been a tireless champion of our Armed Forces, and I thank him for his leadership and for signing this important legislation quickly", he stated.
By B.Alexishvili
23 December 2019 13:05
Much prefer a buyout than dividends as tax is considerably less.
Interesting article on Shell, which is taking a hit of around $2.3bn as impairment for lowering valuations on some of its oilfields because of the current sustained low oil price. Apparently BP and Chevron have done a similar exercise.
That got me thinking: how could a Major reverse this trend and actually put on oilfields which would be valuation enhancing i.e low recovery costs. One good example could be of course our own FRR. It apparently has 18bn barrels on B12 with onshore recovery cost of $12 per barrel. Plus it’s on the doorstep of Europe and Turkey with substantial oil and gas infra running through the country. Then you have large accumulation of natural gas stacked up in the Gareji formation, which is proven and being developed by BP and Azerbaijan in the Caspian Sea.
So, I guess the question is how much would it cost to acquire an asset like B12 which would be balance sheet/asset accretive (providing the B12 geology and reserves are proven). Plus you have $400m cost recovery pool to offset against future sales before you pay any share to the Georgian Govt, and this should not be overlooked when calculating a buy price.
Whatever the final equation is, I would still like to see FRR retain 10% of the operating field.
So, for me, the bigger question mark is around the Arbitration hearing and securing a long term PSA rather than the case with Hope. We know from Zaza’s comments in the wage-dispute article that 7-yrs of the PSA is insufficient time for investors to make a return on their investment. He also said that all issues were resolved except one. Perhaps there has been some horse trading and FRR conceding the cost recovery pool in exchange for a longer PSA to be signed by the new company FRUS?
Remember FRR recently offered to withdraw from the Fiduciary case after all the running around in Cayman and in Cali, racking up a few millions dollars in costs - so why give this up so easily? Maybe money ran out or lawyers not getting paid? Who knows. But it could also mean that they wanted to buy some time to close out a farmout agreement, the arbitration and/or financing agreement?
January is nearly upon us and it is going to be a very Interesting month; first with the Texas case where the Judge granted the Protective Order on Thursday . Will this ‘private’ hearing, any information revealed from the Discovery Order result in the PG case being withdrawn? And force OMF to settle on the CLNs as a whole? Again who knows. Then later in the month, hopefully some kind of resolution on the Arbitration which will be a catalyst to some agreements being closed?
Weekend reading & thoughts only…
The US Senate has approved Kelly Degnan as the new Ambassador of the US to Georgia, a diplomat who has 25 years of diplomatic experience and is a recipient of the Secretary of State’s Expeditionary Service Award.
Elizabeth Rudd has served as acting ambassador to Georgia since Ambassador Ian Kelly departed in March 2018.
The US President Donald Trump presented Degnan for the role in September 2019.
Degnan delivered a speech at the Foreign Relations Committee of the US Senate on October 29, saying that “We will strengthen support to Georgia in the direction of NATO and EU membership. We will work together to strengthen Georgia’s defense of its borders and the creation of a democratic community. I look forward to working with the Georgian government on these and other issues.”
Before the nomination to the post, Degnan served as the political advisor to the Commander of United States Naval Forces Europe – the United States Naval Forces Africa.
Previously, she was deputy chief of mission of the United States mission to Italy, deputy executive secretary of the Department of State, and Deputy Chief of Mission of the United States Embassy in Pristina, Kosovo.
During her 25-year career, she has served as political counselor at the United States mission to the North Atlantic Treaty Organization in Brussels, Belgium, senior civilian representative to Brigade Combat Team Salerno in Khost, Afghanistan, and deputy political counselor at the United States Embassy in Ankara, Turkey.
She speaks Italian, French, Turkish and Urdu.
By Ana Dumbadze
20 December 2019 12:14
From another angle Phil, if I was either ZM or SN I would want to cash in my chips after all that's happened. Could only be good for them and us IMO.
Bigun2, that would definitely be a Carlsberg event.
Sorry for repeating post.
It appears that Zaza+SN together with OMF have jointly submitted a request for a ‘Protective Order’ in the Texas case. This order is designed to prevent any ‘public’ disclosure of certain information to be discussed either in writing or orally during the Texas hearing [7th January 2020]. More importantly it could be related to information uncovered from the Discovery Order that was granted to FRR in the California Fiduciary case in May.
For recollection, worth reminding that the Texas case was initiated by OMF against SN & Zaza for liquidating their personal guarantees issued to OMF for the payment of the US$2M coupon that was due on the CLNs in October 2018.
So [to me] it seems crunch time has arrived for our two guys, its either pay up or to shut up. By this I mean that our guys will either have to hand over US$2M under their guarantees or to dish out the dirt on Hope [within the confinements of the 4 walls of the court].
So, what ‘dirt’ do SN+Zaza have that they are requesting a ‘Protective Order’?
Well, in the original Fiduciary case, FRR alleged that Hope had been involved in market manipulation and illegal interference with the NOMAD.
At that time, we speculated that perhaps Hope was involved in huge forward selling of FRR shares that he was pretty confident of getting from SN+Zaza as FRR did not have the money to cover the interest payment. During late Sept and Oct 2018, we observed massive abnormal trading activity in FRR shares, with huge numbers were being sold in a rising share price [up to 800million in a space of 5-10 trading days]. Some probably related to YA as they were also expecting to receive shares for Sept installment which was paid in cash by FRR and separately the two renegotiated the terms of the SEDA loan - incidentally no news on that front means FRR repaid the US$2.1M which was due in July 2019.
Anyway, the Discovery Order gave FRR the legal right to ask YA if they had acted on behalf of Hope to forward some of these shares. It will also allow Jo Turner (NOMAD) to provide a statement whether Hope illegally interfered with his duties by pressurizing him to release some info in to the market.
Whatever the case, January is going to be an important month and PERHAPS the beginning of the end on all these legal cases… a conclusion to the Arbitration, an out of court settlement to the CLNs with Hope, jettisoning the Fiduciary case, employees getting paid, conclusion to the farmout agreement or financing agreement.
Who knows……. and who knows how much oil is being produced from the 3 wells we [the shareholders] financed: on T45, Dino-2 and T39. Lights might be on but workers not getting paid is not a good sign either.
As a big fat bloke dressed in red normally says during these times………Ho, Ho, Ho - Merry Xmas.
Hmm, January yet again, looks like things will come to a conclusion, at last.
Nice one Chris, especially like the 'delivery of their significant projects moving forwards in Azerbaijan and Georgia.'