PM Gakharia comments Gov’s decision on Frontera case

Prime Minister Giorgi Gakharia has noted "extreme importance" of investment climate in Georgia in the wake of arbitration dispute between the government and the Frontera company.

The Georgian government has decided not to terminate its contract with Frontera Resources Georgia Corporation and to allow the company to continue operating in part of the original contract area. 

Frontera has already agreed to return 99 per cent of the search area, while the state decided to allow the company to continue its activities on the remaining one per cent of the area.

Gakharia explained the decision of his government to not fully reclaim assets involved in the arbitration case won by the government.

Georgia has won an arbitration dispute with Frontera. Georgia, the government, reclaimed 99 percent of the assets, of the territory as a result of this arbitration dispute. Georgia refused to initiate the formal, legal process through which it could have returned the [remaining] one percent, and I will easily explain why – because today, the country's investment climate, the country's business environment is of extreme importance to us and we must not give anyone the opportunity to call this investment environment and the country's business climate into question, even by disseminating wrong information; this is of paramount importance, PM underlined.

"We must not give anyone the opportunity to use the strategic partnership for some targeted purposes in this case as well, and one more issue – of course, there are Georgian people who were employed in this company and the interests of these people must also be protected," Giorgi Gakharia stated.

In April 2020 the government of Georgia announced that the International Arbitration Tribunal had upheld the vast majority of claims filed by the Georgian government against the US oil and gas firm Frontera Resources. Georgia had accused the company of violating the terms of their contract, signed in 1997, claiming Frontera had refused to return a state land they were no longer using for extraction.