Belfast Telegraph

Tuesday 2 September 2014

Exxon Mobil wins Venezuela payout

Venezuela President Hugo Chavez's government nationalised an oil project in the country in 2007

An international arbitration body has awarded Exxon Mobil nearly 908 million US dollars (£585 million) in a dispute with Venezuela over compensation for the nationalisation of its assets, the company has said.

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

The decision by the International Chamber of Commerce confirmed that state oil company Petroleos de Venezuela SA (PDVSA) "does have a contractual liability to Exxon Mobil", company spokesman Patrick McGinn said in an email. He said the award is for 907,588,000 US dollars.

Venezuelan government officials did not respond to messages 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," Mr McGinn said.

The oil company, based in Irving, Texas, has not publicly released figures on how much it was seeking in compensation. Mr McGinn said the company received the 400 page-plus decision on Friday and is still reviewing it.

Exxon Mobil has another arbitration case pending against Venezuela before the World Bank-affiliated International Centre for Settlement of Investment Disputes.

More than a dozen other arbitration cases involving Venezuela are also pending as companies have sought billions of dollars in compensation in response to nationalisations by President Chavez's leftist government.

The Caracas-based consulting firm Ecoanalitica estimated recently, before the latest Exxon Mobil decision, that the bulk of the government's nationalisations involved more than 33.7 billion US dollars (£21.7 billion) in assets, including about 23 billion US dollars (£14.8 billion) in outstanding obligations.

Venezuela has reached negotiated settlements on payments to some other companies. Last month, Mexican cement company Cemex SAB said Venezuela agreed to pay 600 million US dollars (£386 million) for the 2008 takeover of the company's operations in the country.

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