Venezuela to pay ExxonMobil
October 10, 2014
Venezuelan Foreign Minister Rafael Ramirez said Thursday compensation ordered by the World Bank in the ExxonMobil case was within a "reasonable range," after the global lender ordered the Latin American country to pay $1.6 billion (1.2 billion euros) to the US oil major.
The decision by the International Centre for Settlement of Investment Disputes (ICSID) relates to the expropriation of the Cerro Negro project, the La Ceiba project and "production and export curtailments" imposed on the Cerro Negro development in 2006 and 2007.
In a brief statement, ExxonMobil, the world's largest publicly traded oil company, said the decision supported its view that Venezuela failed to fairly compensate it at the time. The company had initially sought around $10 billion in compensation.
But Venezuela also claimed victory in the court case. Ramirez said the tribunal's award was a victory for Venezuelan sovereignty over "exaggerated" claims. He said, however, that Venezuela would pay the fee, only after deducting a previous payment to ExxonMobil from state-owned oil firm Petroleos de Venezuela of $908 million over the Cerro Negro expropriation.
Chavez's costly legacy
Venezuela faces more than 20 arbitration cases over nationalizations engineered by the late Socialist president Hugo Chavez between 1999 and 2013.
Many of the companies nationalized regard the takeovers as unlawful expropriations. Proponents of the nationalizations argue Venezuela should have the right to administer its own resources to improve living standards. Several analysts said Venezuela had avoided heavier fallout this time, but that other cases may prove trickier.
ConocoPhillips has brought the biggest case to date against Venezuela, seeking $30 billion in compensation.
A partial decision in 2013 determined Venezuela failed to act in good faith or properly compensate ConocoPhillips for three big oil assets. A final decision is expected soon.
uhe/cjc (dpa, Reuters)