Venezuelan oil company Petróleos de Venezuela (PDVSA) has reached an agreement to pay $2bn to settle a dispute with ConocoPhillips over the issue of nationalisation of the latter’s assets.
The settlement comes after ConocoPhillips was awarded the $2bn compensation amount by an arbitral tribunal constituted under the rules of the International Chamber of Commerce (ICC) in April.
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Under the terms of the settlement agreement, PDVSA will initially pay $500m in a series of transactions within a 90-day period from the date of signing the deal.
The company will pay the remaining amount quarterly over a period of 4.5 years.
The settlement will see ConocoPhillips terminate its legal enforcement actions of the ICC award, including in the Dutch Caribbean.
ConocoPhillips noted that the settlement is compliant with all appropriate US regulatory requirements, including any applicable sanctions against Venezuela.
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By GlobalDataThe ICC tribunal ruled in favour of ConocoPhillips, citing PDVSA’s failure to uphold its contractual commitments.
ConocoPhillips approached the body after its investments in the Hamaca and Petrozuata heavy crude oil projects in Venezuela were nationalised in 2007.
The company is also engaged in another legal battle against the Government of Venezuela before a tribunal of the World Bank’s International Centre for Settlement of Investment Disputes (ICSID).
According to the US energy firm, the ICSID tribunal already ruled that the expropriation of ConocoPhillips’ investments was in violation of international law.
The tribunal is currently in the process of determining the quantum of compensation owed to ConocoPhillips.
