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Georgia not to Terminate Contract with Frontera Resources

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Georgia’s Ministry of Economy announced on July 23 that the Government decided not to terminate the contract with Frontera Resources, despite winning against Texas-based oil and gas company in International Arbitration Tribunal in April following the long-running legal dispute.

The Ministry said the decision was based on the strategic tasks facing the country, in particular, to maintain Georgia’s positive image as a destination of foreign direct investment; not to allow “purely commercial dispute” with Frontera damage strategic ties with the U.S.; and to “allow Frontera Resources to spend resources on fulfilling its commitments, including pay off salaries of their employees, instead of taking efforts to mobilize its lobbyists.”

The controversy around the U.S.-based company’s operations in Georgia has beset bilateral relations since the number of U.S. lawmakers penned letters to the Georgian government, raising an alert due to “harassment and expropriation attacks” against Frontera Resources by Georgian authorities.

The Ministry highlighted that by the taken approach Georgia aims to maintain open and transparent relations with Frontera Resources. This, the Economy Ministry insisted, requires the Texas-based company to disclose proceedings of the International Arbitration Tribunal’s ruling.

The Government’s decision comes two weeks after Avtandil Onanashvili, 53, an employee of Frontera Resources, reportedly took his life after not being paid by the company for 14 months.

Commenting on the issue, Georgian Prime Minister Giorgi Gakharia stated earlier in May that a single company “could not jeopardize strategic relations between the United States and Georgia.”

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