Thread: Exxon Mobil awarded $908 million in Venezuela dispute

Exxon Mobil awarded $908 million in Venezuela dispute

Associated Press
January 1, 2012, 3:45 p.m.

An international arbitration body has awarded Exxon Mobil Corp. nearly $908 million in a dispute with Venezuela over compensation for the nationalization of its assets, the company said.

Exxon Mobil sought arbitration after President Hugo Chavez's government nationalized an oil project in the country in 2007.

The decision by the International Chamber of Commerce confirmed that state oil company Petroleos de Venezuela "does have a contractual liability to Exxon Mobil," said Patrick McGinn, spokesman for the Irving, Texas-based company. He said the award is for $907,588,000.

Venezuelan government officials did not respond to messages on Sunday seeking comment.

"The dispute is not over Venezuela's power to expropriate assets, but rather the failure of PDVSA to comply with contractual provisions to compensate Exxon Mobil," McGinn said.

The U.S. oil company has not publicly released figures on how much it was seeking in compensation. McGinn said the company received the decision Friday and was reviewing its more than 400 pages.

Exxon Mobil still has another arbitration case pending against Venezuela before the World Bank-affiliated International Center for Settlement of Investment Disputes. More than a dozen other arbitration cases involving Venezuela are also pending as companies seek billions of dollars in compensation in response to nationalizations by Chavez's leftist government.

The Caracas, Venezuela-based consulting firm Ecoanalitica estimated recently, before the latest Exxon Mobil decision, that the bulk of the government's nationalizations involved more than $33.7 billion in assets, including about $23 billion in outstanding obligations.

Venezuela has reached negotiated settlements on payments to some other companies.

Last month, Mexican cement company Cemex said Venezuela had agreed to pay $600 million for the 2008 takeover of the company's operations in the country.

http://www.latimes.com/business/la-f...,5203576.story

Venezuela To Pay Exxon $255 Million for Nationalized Assets

Published January 02, 2012

State-owned Petroleos de Venezuela SA said Monday that it is obliged to pay only $255 million of the $908 million judgment an international arbitration panel awarded Exxon Mobil Corp. for assets nationalized by the Venezuelan government.

The world's largest oil company had asked the International Chamber of Commerce panel to award it $7 billion for the assets nationalized in 2007 by the government of President Hugo Chavez.

PDVSA said the amount of the ICC judgment must be reduced by $191 million to reflect money Exxon still owes the Venezuelan firm for the Cerro Negro project.

The $300 million in PDVSA funds frozen in the United States in 2007 at Exxon's request must also be deducted, while ICC rules allow Venezuela to trim the remaining total by $161 million as long as Caracas pays within 60 days, the state oil giant said.

In 2007, Chavez's government forced foreign oil companies to convert their existing operating agreements into contracts that made them minority partners in joint ventures with PDVSA in the petroleum-rich Orinoco Belt.

While Exxon Mobil and ConocoPhillips refused to accept the new terms and left Venezuela, other oil majors including France's Total, Norway's Statoil, Britain's BP and San Ramon, California-based Chevron remained on as minority partners and received compensation.

The Orinoco Belt, according to the U.S. Geological Survey, is the world's largest petroleum reserve with more than 500 billion barrels of recoverable extra-heavy crude, which is more expensive to refine than lighter varieties of oil.

Exxon's complaint against Venezuela before the World Bank's International Center for Settlement of Investment Disputes is still pending.

http://latino.foxnews.com/latino/pol...#ixzz1iLVGZtMb