ST. GEORGE’S, Grenada, September 9th  — Grenada is preparing for a possible international legal battle with Global Petroleum Group (GPG), with head of the country’s Hydrocarbon Technical Working Group Nazim Burke telling Parliament that the Government is ready to defend its decision to terminate the company’s offshore oil and gas agreements.

Burke made the disclosure during a joint sitting of Grenada’s House of Representatives and Senate, convened to hear directly from Working Group members about the Government’s handling of the GPG relationship.

He said the Development Production Sharing Agreement allows GPG to take the matter to arbitration under the rules of the International Chamber of Commerce, but stressed that the Government believes it has a strong basis for defending its actions.

“We have reviewed this matter very carefully and very closely with international counsel,” Burke told lawmakers. “We are prepared to defend the interests of Grenada against any claims that may be brought by the GPG.”

At the center of the dispute is the Government’s contention that GPG failed to produce a satisfactory development plan to take the country’s offshore resources into commercial production.

Burke said the plan submitted by GPG was deficient in “many material respects” and was never approved by the Advisory Committee established under the agreement.

He also said GPG was required to drill two exploration wells but drilled only one, and the Government cannot independently assess the results because crucial technical information remains outstanding.

“Part of the problem is we don’t have the data,” Burke said when asked what the drilling had revealed.

The Government has also challenged GPG’s claims about the scale of its investment and its ability to finance another drilling campaign.

According to Burke, GPG has claimed to have already invested nearly US$200 million and has proposed spending approximately US$350 million on a new drilling program. But he said the company failed to provide documentation demonstrating that the financing was available.

“Despite our requests, we have received no proof of available financing for the stated future investments,” Burke said.

Another potentially significant issue concerns approximately US$19 million which GPG claims it advanced to Grenada between 2013 and 2015.

Burke said the Government is still attempting to establish the circumstances surrounding the alleged payment. If it is determined that the money was an advance against Grenada’s future petroleum revenues, he suggested an arbitration tribunal could order the funds to be repaid.

The parliamentary presentation took place amid political controversy. The opposition New National Party boycotted the joint sitting, while Independent MP Peter David questioned aspects of the Government’s approach and expressed concern about the potential consequences of arbitration.

“The government considers that termination of the agreement with GPG was the prudent and appropriate course of action,” Burke told Parliament.