By Brian Ellsworth, Reuters
CARACAS — An international arbitration panel has awarded U.S. oil giant Exxon Mobil Corp. US$908 million in compensation for Venezuela’s 2007 nationalization of assets, less than 10 percent of what it sought in a dispute that pitted a top global oil company against one of the world’s largest oil exporters.
Venezuelan President Hugo Chavez is likely to celebrate the ruling as a vindication of his nationalist confrontation with oil companies, aimed at increasing available funding for state-led anti-poverty programs in the OPEC nation. The socialist leader, closely allied with Cuba’s communist government, has cast Exxon Mobil as an icon of the global capitalism that is the pariah of his self-styled revolution. The limited payout in the claim will reduce potential liabilities at a time when Chavez is boosting state spending to shore up support in the run-up to his October re-election bid.
An Exxon Mobil spokesman said in an emailed message on Sunday that the decision by the International Chamber of Commerce confirmed that Venezuela’s state oil company, PDVSA, “does have a contractual liability to Exxon Mobil. The ICC award is for US$907,588,000.”
Exxon Mobil filed an arbitration claim in 2007 seeking as much as US$10 billion in compensation for the Cerro Negro project located in the Orinoco heavy oil belt that Chavez nationalized along with three other projects in the same area.
Two Venezuelan government sources told Reuters on Saturday that an arbitration panel had reached a decision in the case and that it was favorable to Venezuela. They declined to give the amount Venezuela was ordered to pay.