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Montevideo, May 23rd 2024 - 16:13 UTC



Victory for Chavez in arbitration with Exxon Mobil over assets’ nationalization

Monday, January 2nd 2012 - 03:46 UTC
Full article 15 comments
The oil company demanded 10 billion but has to settle for 900 million dollars The oil company demanded 10 billion but has to settle for 900 million dollars

An international arbitration panel has awarded US oil giant Exxon Mobil Corp 908 million dollars in compensation for Venezuela's 2007 nationalization of assets, less than 10% of what it sought in a dispute that pitted a top global oil company against one of the world's largest oil exporters.

Venezuelan President Hugo Chavez is likely to celebrate the ruling as a vindication of his nationalist confrontation with oil companies, aimed at increasing available funding for state-led anti-poverty programs in the OPEC nation.

The populist leader has cast Exxon Mobil as an icon of the global capitalism that is the pariah of his self-styled revolution. The limited payout in the claim will reduce potential liabilities at a time when Chavez is boosting state spending to shore up support in the run-up to his October re-election bid.

An Exxon Mobil spokesman said in an emailed message on Sunday that the decision by the International Chamber of Commerce confirmed that Venezuela's state oil company, PDVSA, “does have a contractual liability to Exxon Mobil. The ICC award is for $907,588,000.”

Exxon Mobil filed an arbitration claim in 2007 seeking as much as 10 billion dollars in compensation for the Cerro Negro project located in the Orinoco heavy oil belt that Chavez nationalized along with three other projects in the same area.

Top Comments

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  • Yuleno

    Exxon loses while it's says it wins.Yes of course they won didn't they.They donated the 9bn to the people of Venezuela.Really?

    Jan 02nd, 2012 - 01:07 pm 0
  • GeoffWard2

    Five years back, ExxonMobil Corp assessed its net investment in the Cerro Negro, Orinoco field - which it was forced to leave through Chavez’s nationalization - at $750 million (less than 1% of the Corp’s worldwide assets).
    ExxonMobil Corp. sought ICC arbitration in 2007 seeking $10 billion compensation.

    This week’s ICC judgement said that the Venezuela's state oil company, PDVSA – who took over the oil field - has a contractual liability to ExxonMobil Corp., and they awarded $908 million.

    This is *small beer* compensation, and it opens the way to easy expropriation by governments of oil/gas extraction enterprises anywhere in the world. It costs the Corp's losses at 'standing assets and commitment', discounting all future profits projected from operations within the field.

    This is unacceptible.

    And, at the very least, I guess the massive new insurances against state expropriations will transfer costs right up the line to the end consumers.

    Jan 02nd, 2012 - 06:26 pm 0
  • Yuleno

    Obviously Geoff you are speaking from the point of view of the corporation.From the point of view of Venezuela there is a different monologue.You're not speaking about justice surely?

    Jan 02nd, 2012 - 10:01 pm 0
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