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World Bank tribunal rejects Venezuela appeal over nationalised Conoco assets

17 March 2014

World Bank tribunal The International Center for Settlement of Investment Disputes (ICSID) has rejected Venezuela's request for a new hearing to contest a 2013 partial ruling that it failed to act in good faith regarding negotiations to compensate US oil company ConocoPhillips for nationalised assets.

The dispute dates from then-President Hugo Chavez's government's takeover of three oil projects in 2007. ConocoPhillips initially asked Venezuela for $30 billion compensation for its stakes in the Hamaca and Petrozuata heavy crude upgraders and a separate offshore project called Corocoro.

Venezuela's state oil company PDVSA said the decision last year was unfair because it had offered $2.3 billion in compensation, which was higher than its $1.8 billion estimate of the assets' value, excluding tax and royalties claims.

While saying Venezuela had not acted in good faith, September's partial ruling did not determine how much money it must pay the US-based company. It also limited the scope of ConocoPhillips' claims by excluding future tax credits.

Several major foreign oil companies, including Chevron, were able to reach agreements with the Chavez government and give up majority stakes in projects while hanging onto minority ones.
ExxonMobil and ConocoPhillips did not reach accords and eventually took their claims to arbitration.

Venezuela has more than 20 arbitration cases pending at ICSID and other courts stemming from Chavez's nationalisations. The country pulled out of the tribunal in 2012, but will still be subject to cases submitted beforehand.

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