Frontera Resources challenges Ukrainian government's decision on Dolphin oil&gas field PSA competition
Frontera Resources, a US company with headquarters in Houston, Texas, acting as the organizer of, and a bidder in, the tender for hydrocarbon exploration under a production-sharing agreement (PSA) within the Dolphin Block of the Black Sea's continental shelf, is preparing a claim against the PSA Interagency Commission and the Ministry of Energy and Coal Industry of Ukraine, which is an operating body thereof.
'We are disappointed with the ambiguous statement by Ukraine's Prime Minister Volodymyr Hroisman, saying that the Dolphin tender was insufficiently representative, lacked competition and, in general, did not meet the expectations of attracting the world's top gas producers in the Ukrainian market, and that he would therefore propose that the Government should launch a new call for tenders to engage a company to produce gas on the Black Sea's Ukrainian shelf,' said Zaza Mamulaishvili, President and CEO of Frontera Resources.
Four companies submitted their bids. However, the Interagency Commission failed to comply with the bidding procedures, in particular, the bid evaluation process, as prescribed by the Law of Ukraine 'On Production Sharing Agreements'. Reportedly, Caspian Drilling international, a business owned by State Oil Company of the Azerbaijan Republic (SOCAR), withdrew their bid due to the said breach of the legislation.
Under the Law of Ukraine 'On Production Sharing Agreements' and a relevant resolution of the Cabinet of Ministers of Ukraine, the Interagency Commission was supposed to have prepared and submitted their conclusions and recommendations regarding the winning bidder to the Government on or prior to July 13, 2019. However the Commission failed to properly meet the above requirements. Accordingly, the Cabinet's announcement of the winning bidder would contradict Ukrainian law.
'Frontera Resources reserves the right to take legal action unless the Interagency Commission’s conclusion in respect of the Dolphin Block tender is annulled. We are of the opinion that the tender preparation and management process was inconsistent with international practices,’ Mr. Mamulaishvili emphasized.
Frontera Resources is a privately held oil and gas exploration and production company, established and headquartered in Houston TX, USA since 1996. Since its inception, the company invested in oil and gas projects around the globe, discovered and certified oil and gas reserves in excess of 14 billion barrels of oil and over 30 trillion cubic feet of gas.