Venezuela to pay Exxon Mobil only $255 million of ruling
State oil company Petroleos de Venezuela says debts and court action reduce an award of nearly $908 million by the International Chamber of Commerce.
January 2, 2012
Venezuela said Monday that it has successfully defended itself in an international arbitration case brought by Exxon Mobil Corp. and will need to pay only $255 million of nearly $908 million awarded to the company.
State oil company Petroleos de Venezuela, or PDVSA, said in a statement that debts and court action reduce what it owes under the ruling by the International Chamber of Commerce.
PDVSA said Exxon Mobil had previously used international courts to freeze about $300 million in Venezuela's U.S. accounts and that the company also has a debt of about $191 million related to the financing of an oil project in the country, as well as $160 million that the arbitration tribunal said was owed to PDVSA.
PDVSA called it a "successful defense" and said Exxon Mobil had initially demanded about $12 billion in compensation.
There was no immediate response from the Irving, Texas, oil company. It confirmed the international chamber's decision Sunday, saying the arbitration body found that PDVSA "does have a contractual liability to Exxon Mobil."
Exxon Mobil sought arbitration after President Hugo Chavez's government nationalized an oil project in the country in 2007.
PDVSA said that Exxon Mobil's compensation demands had been "completely exaggerated."
"After four years of arbitration, the real amount determined by the ICC tribunal indeed represents less than the exorbitant sum initially demanded," PDVSA said in the statement.
Exxon Mobil still has another arbitration case pending against Venezuela before the World Bank-affiliated International Center for Settlement of Investment Disputes.
PDVSA said that Venezuela "will take all necessary steps to defend itself" in that case as well.
More than a dozen other arbitration cases involving Venezuela are pending as companies have sought billions of dollars in compensation in response to nationalizations by Chavez's leftist government.