Page 19 - FSUOGM Week 42

FSUOGM PROJECTS & COMPANIES FSUOGM

US investor asks Georgia to transfer licence

owned by Texas-based Frontera

GEORGIA US company Outrider Management has and the company accumulated a debt of $35mn
asked the Georgian government to transfer to owed to it, for which it was involved in a lawsuit.
Frontera's saga in it the licence for oil and gas block XII in the Outrider Management thus turned to Geor-
Georgia is 20 years'old. east of Georgia owned by Texas-based Fron- gian Prime Minister Giorgi Gakharia with a
tera Resources, according to Business Media request to transfer to the company the right to
Group. produce oil and gas at licence block XII.
Frontera Resources holds a licence for 1% Outrider Management has pledged that
of block XII, which it has said brought it only the country will benefit from the extraction of
$60mn so far and is valid for another seven years. resources and that the company itself will be able
It is not clear whether Outrider Management's to recover the amount that it invested in Frontera
request covers the area under Frontera opera- Resources.
tion, which the Georgian authorities have not "Or if the licence is not extended to us, we
insisted be returned to the state, as is the case want [the Georgian government] to transfer the
with the other 99%. [$35mn] debt to the company that receives the
Outrider Management claims it has a $35mn license,” read a letter sent by Outrider CEO Ste-
claim against Frontera Resources and wants phen Hope to Gakharia.
to recover the money either by obtaining the According to Hope, his company has become
licence or via the company that obtains the block a victim of Frontera's unfair business practices.
XII licence after a potential auction organised by Frontera itself claims that it invested half a
the government. billion dollars over the past 20 years in exploring
The state-owned Georgian Oil and Gas Cor- block XII with and it has derived no revenues
poration (GOGC) announced in April the ter- other than $60mn.
mination by Georgia's State Oil and Gas Agency "We have invested more than half a bil-
of its 1997 oil production sharing agreement lion dollars in exploration for this project and
with Frontera, effective July 23. Frontera has about $60mn worth of oil and gas have been
already returned 99% of the block, which was extracted so far [from the area under operation
subject to only exploration so far. since Soviet era, which remains under Fron-
The termination of the agreement followed tera’s operations]. However, as a result of these
the upholding by an international arbitration investments, a deposit has been identified, but
tribunal of the vast majority of claims filed by its large-scale development has not yet begun.
the Georgian state against Frontera Resources, Accordingly, Outrider Management and other
mainly related to failed promises to develop the companies that have invested capital have not
block. yet received a refund. In this regard, it is under-
Outrider Management explained that it was standable that Outrider Management and other
involved in Frontera’s exploration project in shareholders, including me, want to recover the
Georgia. According to Outrider, their invest- investments,” said Frontera Resources CEO Zaza
ment in Frontera turned out to be problematic Mamulaishvili. ™

Week 42 21•October•2020 www. NEWSBASE .com P19