Venezuela’s government June 11 praised a decision by the International Center for Settlement of Investment Disputes (ICSID) in a case over the 2007 expropriation of ExxonMobil assets by the government of Hugo Chávez. Rafael Ramirez, Venezuela’s energy minister and the president of state oil company Petroleos de Venezuela SA (PDVSA), said the previous day’s decision should force ExxonMobil to “drastically reduce” the $10 billion it has been seeking.
He told reporters the decision by the three-member arbitration panel in Washington indicates the ICSID will only consider ExxonMobil claims over higher royalties and taxes that were imposed after February 2006, when the oil giant created a Dutch holding company to bring arbitration against Venezuela.
ExxonMobil filed the arbitration request in 2007 with the ICSID, a World Bank body, over Venezuela’s nationalization of the Cerro Negro heavy oil project in the Orinoco Oil Belt. Ramírez said the ICSID ruling should have an “important” effect on reducing how much other companies can seek over nationalizations. ConocoPhillips is also seeking compensation for assets seized in 2007 from its heavy oil project. Foreign oil companies operating in the Orinoco Belt had the choice of pulling out, or accepting new terms as minority partners to PDVSA. (AP, Dow Jones, El Universal, Caracas, June 11)