Grenada cancels oil agreements with Russian-linked Global Petroleum Group after 18 years

ST GEORGE’S, Grenada. Grenada’s government has cancelled all arrangements with Global Petroleum Group (GPG), a company with Russian connections, saying it has taken no significant action to establish an oil and gas sector in the country 18 years after the two sides signed a string of agreements.

GPG, which lists its base as Orlando, Florida, was granted a petroleum licence in 2008. Apart from drilling an offshore well in 2018 under the previous government, authorities say there has been little or no activity since.

That well was declared successful by then Prime Minister Keith Mitchell just hours before Grenadians voted in a general election.

The current administration says audits carried out since it took office in 2022 show the company has apparently lost interest, so the cabinet decided to end all arrangements.

“This was not a decision taken lightly,” the government said. “Where a company fails, over an extended period, to meet its obligations and deliver for the country, the government has both the right and the duty to act.”

Company pushes back

GPG responded on Wednesday that it had given the government seven days to reverse course or it would go to dispute resolution to reclaim its offshore exploration rights.

It argued that the two sides are already in a dispute resolution process. “Until such is concluded, the production sharing agreement remains in full force,” the company said, adding that the government’s move was “without legal effect”.

Background

Officials say GPG was licensed for 11 offshore blocks. By 2013 a development permit and sharing agreement had been signed for four of them, and by 2016 the remaining seven were reserved for the company on condition that the first four were brought into production. That never happened, officials said.

“After 18 years, and after every reasonable opportunity given to GPG, the government had a duty to the people of Grenada to bring these agreements to an end,” Attorney General Claudette Joseph said.

Like Barbados and Jamaica, Grenada is keen to find commercial quantities of oil and gas, given its proximity to producers Trinidad and Venezuela and, further south, Guyana.