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 Sunday.
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 SA “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.
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 Irving, Texas-based oil company has not publicly released figures on how much it was seeking in compensation. McGinn said the company received the decision on Friday and was still reviewing its more than 400 pages.
According to the ICC’s arbitration rules, decisions are binding.
Exxon Mobil still has another arbitration case pending against Venezuela before the World Bank-affiliated International Centre for Settlement of Investment Disputes, or ICSID. More than a dozen other arbitration cases involving Venezuela are also pending as companies have sought billions of dollars in compensation in response to nationalizations by 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 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 SAB said Venezuela agreed to pay $600 million for the 2008 takeover of the company’s operations in the country.
Source: The Associated Press & Yahoo Finance