Texas-based oil giant Exxon Mobil has been granted a $77 million award by the World Bank arbitration court following a resubmitted claim worth $1.4 billion. This claim is related to the nationalisation of Venezuela’s Cerro Negro and La Ceiba crude projects in 2007.
The arbitration court’s decision on July 10 marked the end of a prolonged legal battle. The International Centre for Settlement of International Disputes (ICSID) stated that most of the $984.5 million compensation initially granted to Exxon had already been received through a separate claim with the International Chamber of Commerce, resulting in Exxon obtaining $907.5 million in 2011.
To receive the complete sought-after amount from Venezuela, Exxon must return the previously received compensation. As per the award document seen by Bloomberg, this would leave a favorable outcome of $76.9 million for the Texas-based company, along with a sum slightly over $1 million to cover legal expenses. However, the award’s details are not public as publication requires consent from both parties, stated an ICSID press official.
Exxon’s spokesman Todd Spitler refrained from commenting on specific award details but mentioned, “on balance, ICSID ruled in our favor”. Venezuela’s information ministry did not provide an immediate response to a comment request.
The initial compensation awarded to Exxon was challenged by ICSID in 2017, resulting in a partial annulment of a previous ruling that demanded Venezuela to pay $1.4 billion. The court highlighted issues including improper calculation under applicable law. Exxon reintroduced the claim a year later.
Exxon was the first international oil company to exit Venezuela following the nationalisation of oil assets by late president Hugo Chavez a decade ago. ConocoPhillips, which also initiated arbitration for the seizure of its Hamaca and Petrozuata assets in 2007, could potentially benefit from the proceeds. The company is among the top creditors set to receive payment when shares in Citgo Petroleum’s parent company are auctioned in October.
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