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Exactly. The Russians seem to have run rings around the West in terms of influencing elections through cyber warfare and propaganda. Pompeo and various Congressmen are making a lot of noise at the moment but who knows how Georgian politics will respond ? The Georgian people are going to want to see the benefits of what's in the ground soon. This could play into FRR's hands if they are able to make it an election issue. Whichever party can deliver prosperity will have the edge. Of course, the Russians and Bidzina could fight very dirty (even more so than we've seen so far).
It’s certainly encouraging to see all of this support from senior American politicians and the fight is clearly being taken to the Georgian Dream party. It’s still impossible to predict how all this will play out. We all thought we were investing in an O & G play and it turns out that we are caught in a geo-political quagmire in which the interests of UK shareholders are way down the list of priorities. Here’s hoping for a political breakthrough and the appearance of financial muscle from super-majors to bring value to our investment. Pompeo did announce a billion dollar fund for the region the other day - so who knows what is being lined up behind the scenes ?
The political context just gets bigger and bigger. Hard to believe that little Frontera with its investor meetings at America House is at the centre of this. While Zaza was trying to keep small investors sweet in the UK and dealing with huge hurdles in Georgia, Steve N must have been playing statecraft in the US with his powerful friends. The prize has to be huge- both financially and strategically. Nowhere near out of the woods yet but a way out has appeared.
With elections later this year in Georgia it’s significant that the notion of transformational gas reserves has been put into play in the public arena. Zaza has referred to them on national TV (something he said would be a political wrong move 3 years ago). How will the Georgia Dream handle this information in the run up to the election? Will they be the party that delivers or denies Georgian O & G potential? Bidzina is under fire from the US and has hired a lobbyist in Washington. Zaza is making FRR’s case on national TV. Both sides have started a PR war to handle the public perception of how the country’s O & G assets are to be developed. Taking FRR to arbitration may have been another attempt to kill the company or it may have just been a bargaining strategy. Zaza seems confident that the GOGC don’t have a case (only his opinion, of course). The posturing going on at the moment suggests that a fight for public opinion in Georgia could be an important factor in determining how this deadlock gets broken.
Trying to disentangled the gobbledygook of the auto-translate. Zaza does seem to be trying to lay the responsibility for the unpaid wages on the govt. This is Zaza’s direct PR address to the Georgian public. How strong our position is is impossible to tell but the fight goes on.
The Anaklia (Deep Sea Port) Development Consortium is taking its dispute with the Georgian Govt to Arbitration in Geneva.
https://1tv.ge/en/news/anaklia-development-consortium-to-arbitrate-its-dispute-with-georgian-government/
A couple of years ago, I asked Zaza why Frontera weren't on Georgian TV shouting from the rooftops about their nation-building asset. He replied that that would not be a good idea - the implication being that the politics surrounding the asset were too delicate to handle in this way. Now he is on national TV. Looks like it's time to win the hearts and minds of the Georgian people. Of course Steve N (as a foreigner) would be the wrong person to do that. Zaza, at least, is in a better position to argue Frontera's case to an impoverished population who may wonder why an American company is trying to benefit from what they probably see as their national asset. Zaza also has to show that he is not the villain who is withholding wages from the workforce. The PR /propaganda war continues.
The fact that Zaza has gone on state TV today to outline his position must mean that all of this is about to blow open one way or another. Would be good to know what he is saying apart from 'dollars' 'Washington' 'contractors' 'sub-contractors' Sounds like he is outlining money spent, support from USA and perhaps also the status of employees. He looks calm and collected to me. Fairly emotionless and inscrutable. The animations seem to be illustrating a development plan which is something to be positive about.
Zaza has always stayed that FRR have gone over the PSA contract with a fine tooth-comb and have not breached it. Having said that, the GOGC have initiated arbitration must feel they have grounds for complaint. I suspect some of it is to do with FRR’s claim that we are still in the exploration phase rather than the production phase (even though oil has been coming out of the ground and sold for many years). A lot of this will come down to interpretation of the contract and, as we have seen, a lot gets lost in translation.
At the last few investor meetings Zaza described a plan for developing the oil wells that was hugely scaleable with sufficient investment. The gas was a separate matter but, as we know, gas flowed from a faulty Soviet well before it collapsed and Steve made enormous claims for Georgia becoming a regional supplier of gas several years ago. So, if we believe Steve and Zaza, the oil wells can be rolled out and the gas is there for development by someone with deep pockets. Zaza gave many hints that dealing with his countrymen was tricky but seemed confident he could handle them. He may have underestimated their stubbornness. What Zaza seemed more worried about was organised shorting and attacks on the share price that made fund-raising virtually impossible. Who was shorting and who was behind them ? It's hard to take anything at face value in this post Cold War saga but Zaza seemed both confident of success in the fields and frustrated by the hidden hand of his enemies. Surely, it's not long before this comes to a head. With every day it seems to be more and more in the public domain and we have a surprising level of political clout behind us. It remains to be seen what Baker Hughes and BP are cooking up while we await arbitration.
So the dispute has made its way onto Georgian TV. From what we can glean, the GOGC are haggling over the specifics of the PSA contract and focussing on that alone Tatishvili is dismissing Frontera's huge investment in Georgia on the basis that the Georgians didn't ask them to invest so much: "The state did not set off the company an investment of several hundred million, because this investment was not made in accordance with the requirements of the contract." Arbitration may see that differently. Frontera have invested hugely to make the fields viable. Tatishvili acknowledges that FRR have (until recently perhaps) revenue but have diverted it elsewhere and not paid the work force. Of course, he conveniently forgets the $6million VAT rebate.
Cheers, Freescot
On June 2 last year, I tracked down KickMuck (who seemingly knows more than we do) and apart from one post on another share in September, he has remained silent since then.
This is his reply from June 2:
"Hi Zen, thanks for the nudge.
No one is saying anything at the moment, which is understandable. Certainly a very frustrating time for PI holders, but these things take time and folks just have to trust that key players are aligned, as significant holders themselves, in this very valuable asset."
That seemed like a very non-specific reply back then but today's statement seems to identify the key players and backers. Let's hope we hang on to this very valuable asset and see a return for all shareholders very soon. GLA
So, Frontera are saying they have spent 30 times more than the contract obliged them to do. They have the backing of major international banks and major O & G companies. They have assumed all the risk. They have employed hundreds of people and paid tens of millions in tax. In return, they have been harassed by the Georgian Govt and blocked from securing further investment. Despite this, FRR are in a conciliatory mood: "It is a great honor for Frontera Resources Corporation to be part of Georgia's economic revival.”
If they can substantiate all of this before the arbitrators then surely we have a way out of this deadlock and a political and financial solution can be found.
This mention of tens of millions paid in taxes is surely made to counter-balance the propaganda about unpaid wages. The wages would be paid if the government paid FRR the tax rebate.
We have certainly been paying VAT. We are owed a $6 million rebate.
It’s highly significant that they are re-iterating that claim. This is something that the Georgian Government cannot be seen to be stalling. Of course, the Government have challenged Frontera’s claims in the past but FRR are now stating that they are ready for a multi-billion dollar development of the natural resources. They must now have irrefutable evidence and a development plan in place. After all, FRR’s claims are going before arbitration. As others have said, if all of this is make-believe, why is such prolonged and dirty fight taking place ?
"The founding shareholders of the company are prominent representatives of the American energy and financial industry, including Baker Hughes, Conoco, JP Morgan, Shell Capital and many more."
Looks like our backers are coming out of the shadows.
Why the open attacks on Ivanishvili now ? FRR seem to be at the centre of a huge political tug-of-war. Regdik is surely right when he says ‘Both sides will soon play their final hand (arbitration final submission) so not long to wait or will a deal be struck prior to this.’. We can only hope we get to share in any spoils.
After 13 months of Cayman courts, California courts, rumours of multi-million dollar loans, of moving the asset out of Hope’s grasp with the collusion of the Georgians, we now seem to be at loggerheads with the host government who, according to the opposition party, is trying to kill the company. None of us could have foreseen these surreal twists and turns A very dirty fight is going on which we can barely understand. I think it was MadP who mentioned a shadowy US company that advises in such disputes and might be operating on our behalf. What we can see looks truly terrible but maybe it’s all posturing and brinkmanship. One way or another, some kind of conclusion has to come to light soon. Let’s hope we are near some kind of compromise deal before or via arbitration.. This bizarre adventure had gone on long enough.