An arbitration tribunal of the International Chamber of Commerce (ICC) has ruled in favour of a claim that Venezuela’s state-owned oil firm Petróleos de Venezuela (PDVSA) owes US exploration and production company ConocoPhillips a sum of $2.04bn over charges of nationalisation.
The tribunal ruling follows a petition filed by ConocoPhillips claiming compensation after its stakes in the Hamaca and Petrozuata heavy crude oil projects in Venezuela were expropriated in 2007.
The Government of Venezuela confiscated assets belonging to major oil and gas companies under former president Hugo Chávez.
ConocoPhillips legal senior vice-president and general counsel Janet Langford Carrig said: “The ruling upholds the contractual protections to which ConocoPhillips is entitled under the applicable agreements and acknowledges PDVSA’s independent contractual liability arising from the Government of Venezuela’s unlawful and uncompensated expropriation of ConocoPhillips’ investments.”
Noting that the ICC arbitration award is final and binding, the company added that it will work towards recovery of the compensation as per the ruling.
The company has another pending legal case in the form of an investment treaty arbitration against the Government of Venezuela, before a tribunal of the World Bank’s International Centre for Settlement of Investment Disputes (ICSID).
In the investment treaty arbitration, the ICSID tribunal passed a ruling stating that the confiscation of ConocoPhillips’ investments is a violation of international law.
The Venezuelan Government is facing a similar legal battle with Exxon Mobil over compensation related to nationalisation of the Cerro Negro project in 2007.
Last year, the ICSID overturned a 2014 ruling ordering Venezuela to pay $1.4bn in compensation to Exxon Mobil, according to Reuters.
