US oil giant Exxon awarded $77m in claim against Venezuela

Texas-based firm has been in a long legal battle over nationalisation of oil fields by Hugo Chavez

Exxon Mobil has been in a long legal battle over the nationalisation of oil projects in Venezuela in 2007. Reuters
Powered by automated translation

The World Bank arbitration court awarded $77 million to Exxon Mobil in a resubmitted claim worth $1.4 billion over the nationalisation of Venezuela’s Cerro Negro and La Ceiba crude projects in 2007.

The award is the result of a long legal battle that ended with the International Centre for Settlement of International Disputes deciding on July 10 that most of the $984.5 million compensation granted to Exxon already had been paid in a separate claim with the International Chamber of Commerce, which resulted in Exxon receiving $907.5 million in 2011.

If Exxon wants to receive the full amount it is seeking from Venezuela, it must return what it previously received, according to a copy of the award document seen by Bloomberg.

That would leave $76.9 million in favour of the Texas-based firm, plus a little over $1 million to cover part of their legal expenses. The award isn’t public because it requires consent from both parties to be published, an ICSID press official said.

Exxon said it would not comment on details of the award but “on balance, ICSID ruled in our favour”, company spokesman Todd Spitler said.

Venezuela’s information ministry did not immediately respond to a request for comment.

The amount of the initial compensation awarded to Exxon was challenged by the ICSID in 2017 when it partially annulled a previous ruling that ordered Venezuela to pay $1.4 billion.

The court stated at the time that the compensation was not calculated under applicable law, among other issues. Exxon reintroduced the claim one year later.

Exxon was the first international oil company to abandon Venezuela after the late president Hugo Chavez nationalised oil assets a decade ago.

ConocoPhillips, which also filed for arbitration for the seizure of its Hamaca and Petrozuata assets in 2007, could soon see a slice of the proceeds.

The company is among the top creditors to be paid when shares in Citgo Petroleum's parent company are sold at auction in October.

Updated: August 13, 2023, 4:30 AM