Exxon Mobil Corp. Awarded £56 Million in Claim Against Venezuela
Posted 14/08/2023 10:33
In a significant legal outcome, Exxon Mobil Corp. has secured an award of approximately £56 million in a long-standing claim against Venezuela. This legal dispute revolves around a resubmitted claim valued at around £1.4 billion, stemming from the nationalization of Venezuela's Cerro Negro and La Ceiba crude projects in 2007.
The conclusion of this extended legal battle is attributed to the World Bank arbitration court, which has granted Exxon Mobil Corp. the mentioned compensation. This award comes after a series of complex proceedings. The International Center for Settlement of International Disputes (ICSID) determined on July 10 that a significant portion of the initial compensation of approximately £44 million, previously awarded to Exxon, had already been settled through a separate claim with the International Chamber of Commerce. This resulted in Exxon receiving around £41 million back in 2011.
However, a specific condition accompanies this award. If Exxon intends to secure the complete sought-after amount from Venezuela, it is required to return the compensation it had previously received. Accounting for this requirement, Exxon stands to receive around £15 million, in addition to a nominal amount surpassing £200,000 to cover partial legal expenses. It is important to note that the award's details remain undisclosed, as mutual consent from both parties is necessary before its public disclosure, as confirmed by an ICSID press official.
While Exxon refrains from providing specifics about the award, it acknowledges the favorable outcome. According to Todd Spitler, Exxon's spokesperson, "on balance, ICSID ruled in our favor."
Venezuela's information ministry has not yet responded to the request for comment on this matter.
The journey through this legal process had its share of twists and turns. The initial compensation granted to Exxon faced challenges when the ICSID partially invalidated a prior ruling in 2017, which had mandated Venezuela to pay around £1.4 billion. At that time, the court asserted that the compensation calculation did not align with applicable law, among other issues. Exxon subsequently reintroduced its claim a year later.
Exxon's role in this case extends beyond the legal realm. The company holds historical significance as the first international oil entity to withdraw from Venezuela following the nationalization of oil assets by the late President Hugo Chávez a decade ago.
In a broader context, ConocoPhillips, entangled in its arbitration for the seizure of Hamaca and Petrozuata assets in 2007, anticipates a potential share in the proceeds. This development emerges as ConocoPhillips positions itself as one of the prominent creditors to be compensated upon the auction of shares in Citgo Petroleum Corp.'s parent company, scheduled for October.