CARACAS — Venezuela on Monday said it would only need to pay US$255 million of the US$907 million awarded to ExxonMobil in an international arbitration case over the nationalization of the U.S. oil giant’s assets. The award amount by the Paris-based International Chamber of Commerce panel was far below the US$12 billion sought by the oil titan for nationalization of key fields in the Orinoco basin region that included two ExxonMobil operations. A statement by the state-owned oil firm Petroleos de Venezuela (PDVSA) said the government would pay US$255 million to the U.S. firm within 60 days to settle the dispute. The statement hailed what it called a “successful defense” against the ExxonMobil claims and said the U.S. giant had been seeking an “exorbitant” sum for compensation. It noted that ExxonMobil was pressing arbitration before a World Bank panel and said Venezuela “will take all necessary steps to defend itself” if the company pursues the case. It said ExxonMobil’s claims were “completely exaggerated and defied logic.” From the US$907 million, Venezuela plans to deduct a number of charges including US$191 million for the impact of ExxonMobil’s withdrawal on the state’s bonds, US$300 million for the freezing of PDVSA assets in the United States and US$160 million in counter-claims by Venezuela. ExxonMobil spokesman Patrick McGinn said the company recognizes “Venezuela’s legal right to expropriate assets subject to compensation at fair market value.” “Approximately US$160.6 million of ExxonMobil debt has already been credited by the tribunal,” McGinn said in an email. “The remaining US$746.9 million could be paid through a combination of approximately US$305 million in PDVSA funds already held for this purpose by New York courts, PDVSA’s cancellation of additional project debt owed by ExxonMobil and payment of additional cash,” he said. The biggest U.S. oil firm launched a series of legal challenges after the leftist government of President Hugo Chavez moved to nationalize foreign oil firms’ assets. In June 2006, Venezuela passed a law forcing foreign oil companies to give PDVSA at least a 60-percent share in their operations at oil fields in the Orinoco basin. Some companies accepted compensation for the move, but ExxonMobil and ConocoPhillips disputed it. “It is a smashing success for PDVSA because Exxon really was seeking a small amount,” oil sector analyst Rafael Quiroz told AFP.
At one point during the lawsuit, PDVSA was close to agreeing to pay out US$5 billion, said Quiroz, a former official with the state oil giant.