CARACAS—The International Chamber of Commerce’s arbitration tribunal has dismissed U.S. oil company ConocoPhillips’ $1.5 billion claim against Venezuelan state oil company PDVSA, according to a copy of the ruling seen by Reuters on Aug. 2.
The case related to Venezuela’s breaking of a contract with Conoco regarding its stake in an offshore oil project called Corocoro. Under the arbitration ruling, PDVSA will have to pay only $33.7 million, plus interest, for an outstanding loan to Conoco, according to the ruling.
The ruling was signed by three New York-based arbitrators and dated July 29.
The Corocoro case is separate from an $8.7 billion award granted to Conoco by the World Bank’s International Center for Settlement of Investment Disputes (ICSID) related to the 2007 expropriation of all of Conoco’s projects in the South American country.
Jose Ignacio Hernandez, designated by opposition leader Juan Guaido as his chief legal representative abroad, is seeking to annul that award, arguing that the methodology to determine the compensation was “errant.”
Guaido, the leader of the opposition-controlled National Assembly, in January invoked Venezuela’s constitution to assume an interim presidency, arguing President Nicolas Maduro’s 2018 re-election was illegitimate. Maduro calls Guaido a U.S. puppet seeking to oust him in a coup.
Guaido and Hernandez have prioritized protecting PDVSA’s assets abroad, namely U.S. refining subsidiary Citgo, which has come under threat by creditors and other parties seeking compensation from Venezuela’s highly indebted government.
Conoco’s assets in Venezuela were expropriated in 2007 following the nationalization of the country’s oil industry led by then-President Hugo Chavez. The firm left the OPEC nation after it could not reach a deal to convert its projects into joint ventures controlled by PDVSA.
The ICC had in 2018 ruled that PDVSA had to pay Conoco $2.04 billion for the early termination of a partnership contract that allowed Conoco to participate in the Hamaca and Petrozuata projects in Venezuela.
In a statement, Conoco acknowledged that it “received the final award in the Corocoro ICC arbitration against PDVSA” and said its award totaled $54 million, including interest. It said it had received $665 million from PDVSA toward the 2018 ICC ruling.
PDVSA did not respond to a request for comment.
Conoco tried to enforce the award by seizing PDVSA’s Caribbean assets, but the dispute was resolved last year through a payment agreement.
Conoco has separately sued PDVSA and Citgo in a Texas court requesting that Citgo’s assets be protected from other creditors and not sold until the arbitration process is ultimately resolved.
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