Grenada’s government has cancelled all arrangements with a Russian-backed oil company, saying it has not taken any significant action to establish an oil and gas sector in the country 18 years after the two sides had signed a string of agreements.

Global Petroleum Group, which lists its base as Orlando in Florida but is known to have Russian connections, was granted a petroleum license back in 2008 but apart from drilling an offshore well back in 2018 during the time of the previous government, authorities say there have been little or no activity since. The well was declared to be successful and gushing with hydrocarbons by then-Prime Minister Keith Mitchell just hours before locals had voted in a general election.

The result is that the new administration of PM Dickon says that audits the government has conducted since taking office in 2022 have shown that the company has apparently lost interest in the Eastern Caribbean nation so the cabinet has decided to terminate all arrangements with the firm.

“This was not a decision taken lightly," the government said in a statement. "Grenada is a nation that honors the contracts it signs and expects the same of its partners. 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. This was a necessary step, taken in the national interest, to protect Grenada’s resources and its future."

But the company fired back on Wednesday, saying that it has given the administration seven days to reverse course or it will head to dispute resolution to reclaim its rights to offshore exploration.

It argued that the two sides are in a dispute resolution process and not much can be done until this is resolved.

“We highlight again that until such is concluded, the production sharing agreement remains in full force,” Global Petroleum stated, arguing that the government has acted illegally. The government’s attempt to end the agreements is inconsistent with the contractual rights and obligations of the parties and is without legal effect.”

Like Grenada's Caribbean neighbors, Barbados and Jamaica, Grenada is desperate to find commercial quantities of oil and gas, especially because of its geographic proximity to oil and gas producers Trinidad and Venezuela and further south to Guyana, by far the largest producer and exporter in the 15-nation grouping.

Authorities contend that Global Petroleum had been granted a license 18 years ago for 11 offshore blocks. By 2013, a development permit and sharing agreement had been established and signed off for four of those blocks. By 2016, the remaining seven blocks were reserved for GPG on condition that the original four were brought into production, but this never materialized, officials said.

“Grenada (therefore) has acted lawfully, responsibly, and in the national interest,” Attorney General Claudette Joseph said in a statement. “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. Grenada deserves better, and we are moving forward with confidence and with respect for the rule of law.”