Flagged up on LSE by bugsy-b and dated Feb 14th 2020
Flagged up on LSE by bugsy-b and dated Feb 14th 2020
Details of the Frontera dispute - interview with the company’s CEO
According to Zaza Mamulaishvili, executive director of the American energy company Frontera, they started creating problems for the state after 2013. Mamulashvili spoke about it in an exclusive interview with BMG.
The interview concerns the company’s operations in Georgia and the ongoing arbitration dispute in which the Oil and Gas Corporation is seeking $ 70 to $ 80 million in compensation from Fronetra. The dispute has been ongoing since 2017, with numerous statements by US and Senate and congressional officials. The Prime Minister’s letters to the congressmen of the government to the rule of law are calling. BMG- the exclusive interview
Mamulaishvili says that is not consistent with the information that the company arbitration process, “Oil and Gas Corporation” $ 3.5 billion dollars, demanded compensation and that the Co poratsiis by “deliberately” spread ipnormatsiaa.
"First of all I want to emphasize that we are not in dispute, the state is in dispute with us. The contract is in the form of GOGC and the State Oil and Gas Agency. We have no violations under the contract, we have been operating in Georgia for over 20 years and have never violated any. The promise of this contract, however, is not only a matter of course bitrazho dispute began, but other disputes were initiated in the courts. I mean the courts of disputes. So for us it is not new. Since 2013 is different from the dispute against us.
Difficulties have virtually begun since 2013 in our work and operations. Prior to that, our business was running smoothly. There were no major issues that we could not solve.
Since 2013, after investing heavily in oil and gas, and especially in the supply of natural gas; As soon as we announced that we were going to move on to the next phase of work, it was then that there were major problems and practically a narrowing of our work, which resulted in several lawsuits being brought against us by the state. Subsequently, the Court of Arbitration sued and so on.
Because we have a very strong position on what the Georgian court is trying to do, this process has been going on for a long time, and the final decision has not yet been made. "
"This is not true. First of all, we did not sue the state, the opposite is the case. The state is suing us. I reiterate that the company does not charge the state $ 3.5 billion.
At $ 3.5 billion, that’s the amount we could potentially have earned if the government hadn’t prevented us from continuing operations. But this is not the amount or unaccountable income that the company claims against the state. The company has no claims against the state and has not initiated any lawsuits against it. "
"KPMG probably got the information that was provided by the Oil and Gas Corporation. error, which intentionally or unintentionally is allowed.
but, unfortunately, they do not take any step gamosastsor In order to be. I want to tell you, it is very important that the company charges no state, no “Oil and Gas Corporation”, the court cases and the government began to GOGC- was against us. "
"To be honest, we became Prime Minister in 2013. You know that we have been working in Georgia for over 20 years, for almost 22 years. We are the largest US investor in the Georgian energy sector. During this time, usually if the administration changes, We become leaders - whether the prime minister or the president We report on where we are and where our work is going.
In 2013, the purpose of this meeting was exactly the same as that of its predecessors. We introduced him to our work, our progress, our results, what we were planning, and by the way, we had a wonderful meeting with him [Bidzina Ivanishvili]. There were a few minor operational issues, exactly the administrative issues we dealt with, but there was a very good and productive meeting and interesting conversation.
This meeting did not reflect well on our work, unfortunately. Difficulties were exacerbated and aggravated, we came to the conclusion that the state had initiated several court cases in Georgia and crowned international arbitration dispute.
[Ivanishvili] was talking about the stockpile, the large stock of natural gas that we were looking at after a huge investment and huge amount of work, and talking about plans and a vision for what would be the next step and the next stage. How the company saw how the company would develop this enormous potential for Georgia. That was the content of this meeting.
"The volume of work is unprecedentedly large for Georgia, and not just for Georgia. Any region or country would be jealous of the amount of work and investment that we have invested. When was the end of those works? On the basis of which they say that there is no such stockpile of natural gas, I assure you that the stockpile is, and is very large,
a stockpile that can radically change Georgia’s economic development - for the sake of its prosperity.
How did we come to this conclusion? - This conclusion was made based on the results of the work we have been doing for years. This is seismic research, it is drilling, it is testing wells, it is a variety of so-called stimulation of extraction, oil and gas layers. As a result of this work, as soon as we submit all five of the world’s largest US companies that certify these supplies, they spend a year-and-a-half on each of these occasions to process this material and give us the first report in the history of Georgia. Face of Georgia ripe.
Such a thing had happened before. We are proud that due to the huge amount of work done and the huge investment, we have created tremendous potential for Georgia that no one knew about.
We believe that the next stage will be something that we thought in 2013 as well, but so far have not been given the opportunity to move to the next stage, which is the resource and the actual equity behavior. "
"For example, the well-known Shah Deniz field, which extracts gas from the Caspian Sea, began 15-20 years ago, virtually 2000 years later. This field was discovered in 1952 after a huge amount of work in 1952. In order to conduct research, drill, develop the most correct and optimal techniques A. Drilling technology, conducting two-dimensional and three-dimensional seismic research, which we conducted for the first time in the history of Georgia, has never happened before, it needs to be sampled - 2,000, 3,000, 5,000 meters deep, you have to analyze these samples. A very technologically challenging process that has been around for the last 20 years Art busy. "
"Yes, our type of companies are oil exploration and extraction companies. This means that the company is engaged in both oil exploration and extraction activities. Usually, the exploration stage is a loss. Very intense investment and only after you find and find this stock and start taking advantage of it. Agis, is then transferred to the company has been profitable stage.
We at this stage are that this huge investment, as soon as we arrived at the stage that confirmed reserves certification is very large and well-known company and is now moving on to the next stage, after the fact, problems and The oppression of our work begins.
We were not allowed to do large-scale work as we thought. Still, we still continued drilling, but that certainly wasn’t the scale we wanted to capture. The reason for this was precisely this antagonistic attitude towards our work. "
"Our interest in our problem has not happened yesterday and today, they are very familiar with our work and our company. Our work is very closely related to Georgia and other projects, closely related to Houston, different labs and people. So they know our business well and know The situation, even under the circumstances This is not the first time that supportive communications have been sent to Georgia without the support of congressmen and senators, as well as the administration in 2013 and 2014, we would not have been able to build the first gas pipeline in Georgian history built for the transportation of Georgian gas.
Had it not been for such strong support from senators and congressmen in 2014, we would not have been able, even though we were contractually contracted - to obtain a license to deliver the gas we had acquired in the pipeline we built. So, in 2013-2014, communication from Washington to our government and government was even more intense than it is now. So, this is not news, and such a tone and attitude and such concerns have been there for a long time - because of the circumstances in which the American company operates in Georgia.
As for the statement on lobbyists. A congressman cannot be a lobbyist. A lobbyist may be just a lobbyist, but the source of some information is that some are trying to prove that Frontera is paying any politician, this is not true.
Never, Frontera has not paid any politician any money. "
" , Although we can still work on the ground for many more years - which is an existing contract is identified.
They want to prematurely stop our this agreement and ask us by about $ 80 million dollars, as if we are in the state have the money to pay, which is also not true. "
"different types kalkualatsia have made that quite clear to us, but given the fact that the process is currently in progress, I will not go into details. However, the fact that the company owes any kind of debt to the state must have been paid and not received - it is not true. "
"Some say 11 months, some say 14 months, some say 8 months - none of these figures are correct. There is some debt to some employees for a few months. The
company was ready to sue the state without a lawsuit showing a very bad angle. Georgia in terms of investment attractiveness.
As if the government had agreed to all of this, negotiations have been going on intensively for the last 4 months, perhaps even more so, even when we were negotiating with the state, we did not ask those employees to resign in the hope that we would sign the agreement and continue our usual routine.
But at the last moment, the state refused to agree. Because of this expectation, when we didn’t ask employees, we owed them debt.
Also, the state does not pay the VAT we collected. It must compensate for the paid VAT, which is already several million.
Because of all this [the employees] have created this situation. However, we have long been offering our employees the option to repay the debt they have for several months. But here, too, in some cases, the state, in some cases, other people associated with the government, are announcing these people and calling for action.
still have not signed up for this staff to the agreement, which resulted in the need to start for several months to make payments, but the Ministry of Economy and some MPs to encourage them not to do that. "
"It has its own procedure for determining what conditions there are for the company to be traded on the stock exchange.
We were, by the way, the first company to put a Georgian project on the stock market for the first time in Georgia’s history, even when the stock market didn’t know Georgia. Very successful listing that got in the way paved many other Georgian companies, and I’m proud of that.
We - the public company we were in 15 years. In these conditions, when the state is not only promoting, but also harmful actions carried out in very many years, just like a lost cause for the stock market presence. So the count, the more appropriate It would be that as a private equity society oebas continue our work. Then we’ll see. "
"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 to the state and we know the terms of the contract have not been violated, so We are optimistic, we hope and believe it is Georgia will continue to work and move in the right moment, when not only the company, but also for the very large benefits will be discovered by our oil and gas resource potential. " … ENDS!
eyeson…Blimey there’s something to chew on over the weekend!!