ExxonMobil Awarded $77 Million for Venezuela Claim Worth $1.4 Billion
ExxonMobil Corp. has been awarded $77 million in a dispute with Venezuela over a $1.4 billion claim. The award was made by the International Centre for Settlement of Investment Disputes (ICSID), a World Bank arbitration body.
Background of the Dispute
The dispute between ExxonMobil and Venezuela dates back to 2007, when the oil giant was forced to abandon its Cerro Negro project in the Orinoco Belt. The project was a joint venture between ExxonMobil and Petroleos de Venezuela SA (PDVSA), the state-owned oil company.
ExxonMobil claimed that the Venezuelan government had violated the terms of the joint venture agreement by refusing to pay for its share of the project. ExxonMobil sought compensation for its losses, and in 2011, it filed a claim with ICSID.
ICSID’s Ruling
In its ruling, ICSID found that the Venezuelan government had breached its obligations under the joint venture agreement. The tribunal ordered the Venezuelan government to pay ExxonMobil $1.4 billion in compensation.
However, the tribunal also noted that the Venezuelan government had been unable to pay the full amount due to its financial difficulties. As a result, the tribunal reduced the award to $77 million.
ExxonMobil’s Response
ExxonMobil welcomed the ruling, saying that it was a “significant victory” for the company. In a statement, the company said that it was pleased that the tribunal had recognized the Venezuelan government’s breach of its obligations.
The company also noted that the ruling was a “vindication” of its decision to pursue the claim. ExxonMobil said that it would continue to pursue its rights under the joint venture agreement and seek full compensation for its losses.
Venezuela’s Response
The Venezuelan government has yet to comment on the ruling. However, it is likely that the government will appeal the decision.
Implications of the Ruling
The ruling is a significant victory for ExxonMobil, as it is the first time that an international tribunal has ruled in favor of the company in its dispute with Venezuela.
The ruling could also have implications for other companies that have been affected by the Venezuelan government’s actions. It could encourage other companies to pursue claims against the Venezuelan government, as they may now be more confident that they will be able to receive compensation for their losses.
Conclusion
ExxonMobil has been awarded $77 million in a dispute with Venezuela over a $1.4 billion claim. The award was made by the International Centre for Settlement of Investment Disputes (ICSID), a World Bank arbitration body. The ruling is a significant victory for ExxonMobil, as it is the first time that an international tribunal has ruled in favor of the company in its dispute with Venezuela. The ruling could also have implications for other companies that have been affected by the Venezuelan government’s actions, as it could encourage them to pursue claims against the Venezuelan government.