Venezuela must pay ConocoPhillips more than $8 billion for the country’s seizure of the oil and gas company’s oil assets in 2007, a World Bank arbitration tribunal ruled March 8.
The total award of $8.14 billion, plus an earlier arbitration award of $2 billion, makes the U.S. producer the biggest victor in claims from a wave of nationalizations last decade. However, Venezuela could still contest the award.
The U.S. company had sought up to $30 billion for the takeover of three oil projects more than 10 years ago by the late socialist leader Hugo Chavez, according to a World Bank report. The tribunal, known as ICSID, found the takeover unlawful in 2013 and two years ago rejected the OPEC-member nation’s request for reconsideration.
The award was for $8.44 billion plus interest and fees, but the tribunal reduced it by nearly $300 million to account for payments Venezuela had made to lenders. The tribunal said ConocoPhillips could not seek double recovery from its claims, which should reduce the total amount it can recover.
Venezuela’s oil production has fallen to an almost seven-decade low due to mismanagement, a lack of investment and financial sanctions imposed by the U.S. government. Its declining oil exports have led the nation into a severe economic crisis and fueled an exodus of about 3 million residents.
Venezuela state-owned oil company PDVSA was unavailable for immediate comment. A spokesperson for law firm Curtis Mallet-Prevost, Colt & Mosle, which represented Venezuela before the tribunal, was also unavailable. ConocoPhillips also had no immediate comment.
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