Gov't Not to Terminate Contract with Frontera Resources Georgia Corporation

The Georgian government has decided not to terminate its contract with Frontera Resources Georgia Corporation and to allow the company to continue operating in the part of the original contract area where oil production has been underway since Soviet times, about 1% of the state search area, as about 99% of this area has already been returned by Frontera to the state in accordance with the arbitrage decision.

The Ministry of Economy and Sustainable Development explains that the decision of the state is conditioned by the strategic goals of the country, in particular: 

"It is important for Georgia to have an international reputation related to the country's investment environment, which is constantly rated highly positively. Despite the state's absolutely solid position in the dispute with 'Frontera,' it is inadmissible to cast a shadow on this international reputation. 

"Relations with the United States, which is the main strategic partner of Georgia, are a fundamental and principled issue for the state. Although the issue of Frontera is not a topic of discussion in official relations at all, it is unequivocally undesirable for the government to give anyone in America's highly diverse political spectrum a pretext to use this absolutely routine commercial dispute to harm the strategic relations between the countries.

"Georgia's investment image and close relationship with the United States are important, first and foremost, for the relationship with the American business community, because special attention is always paid to attracting American investment to Georgia."

The Ministry notes that such a decision "underlines Georgia's sincere desire to have an open and transparent relationship with Frontera", for which it is also desirable for the company to publish the summary of the arbitration award, which does not contain confidential information about the company and which sheds light on the dispute.

"As a result, excessive interest and speculation on this issue will end, and stakeholders (including US senators and congressmen) will also receive relevant information from an open source," reads the statement released by the Ministry. 

By Elene Dzebisashvili