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Star Phoenix Group (STA)

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Friday 15 January, 2021

Star Phoenix Group

Georgia Update - Serving a Notice of Dispute

RNS Number : 7791L
Star Phoenix Group Ltd
14 January 2021
 

Star Phoenix Group Ltd

("Star Phoenix" or "the Company")

 

15 January 2021

THE INFORMATION CONTAINED WITHIN THIS ANNOUNCEMENT IS DEEMED BY THE COMPANY TO CONSTITUTE INSIDE INFORMATION AS STIPULATED UNDER THE MARKET ABUSE REGULATIONS (EU) NO. 596/2014 ("MAR"). UPON THE PUBLICATION OF THIS ANNOUNCEMENT VIA REGULATORY INFORMATION SERVICE ("RIS"), THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN. 

 

GEORGIA UPDATE - SERVING A NOTICE OF DISPUTE

Star Phoenix (AIM: STA), an international company with an oilfield services business in Trinidad and an oil and gas interest in Indonesia, is pleased to provide an update in relation to a legal dispute with the government of the Republic of Georgia ("Georgia") over a production sharing contract dated 29 March 2007 for block VIA   (the "PSC").

The Company is pleased to advise that it and Strait Oil and Gas Limited ("SOG"), a private company incorporated in Gibraltar, in which Star Phoenix holds a 65% interest and which entered into the PSC, have engaged new legal advisers Enyo Law LLP ("Advisers") and have been working with them on progressing an arbitration claim against the government of Georgia.

The Advisers have now formally notified the government of Georgia of the existence of an investment dispute under the Energy Charter Treaty (the "ECT") (the "Notice of Dispute"). The Notice of Dispute sets out the position on SOG's unfair treatment in Georgia and how its investment in Georgia, which exceeds US$22 million, has been damaged. In particular, the Notice of Dispute states that the termination of the PSC by the Government of Georgia, as well as the subsequent re-tendering of the same territory as Block VIA, to which it held exclusive rights under the PSC, was unjustified, arbitrary and contrary to the provisions of the PSC and has deprived SOG of the entire value of its investment. Georgia's measures constitute breaches of the protections established by the ECT, including, inter alia Georgia's guarantee: (i) to observe obligations it entered into with SOG by concluding the PSC; (ii) not to impair by unreasonable or discriminatory measures the management, maintenance, use, enjoyment or disposal of the investment; (iii) that the investment would be accorded fair and equitable treatment; and (iv) that the management, maintenance, use, enjoyment or disposal of the investments would not be nationalised, expropriated or subject to measures having an effect equivalent to nationalisation or expropriation.

Whilst the Company and SOG continue to hope that an amicable solution can be found to the present dispute, they fully reserve all of their rights and remedies arising out of what they strongly believe to be ECT breaches by the government of Georgia and formally consent to submit their investment treaty claim under the ECT to international arbitration.

Background

The Company holds a 65% interest in SOG. SOG entered into the PSC with over US$22 million spent on development of block VIA. The minimum work programme stipulated by the PSC had been satisfactorily completed, as previously confirmed by the State Agency for Regulation of Oil and Gas Resources of Georgia (the "Agency"). The PSC granted SOG the exclusive rights of exploration and production of oil and gas on block VIA until 2032.

As previously announced, during 2017 the Agency announced a new public tender inter alia for two areas, respectively referred to as new blocks VIA and VIC. Both of these blocks were carved out of the block VIA, in relation to which SOG had been awarded exclusive exploration rights under the PSC. Upon conclusion of the public tender, exploration rights for these blocks were awarded to new bidders.

All previous efforts to reach an amicable resolution of this issue by the Company and SOG with the Agency were unsuccessful.

This announcement has been approved by Chairman Zhiwei (Kerry) Gu on behalf of the Company.

 

 

Contact Details

 


 

Star Phoenix Group Ltd

Evgenia Bezruchko (Group Corporate Development Manager & Joint Company Secretary)

e. [email protected]

t.   +44 (0)20 3865 8430

WH Ireland Limited (Nominated Adviser and Broker)

James Joyce / Matthew Chan

t.   +44 (0)20 7220 1666

 

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