ICC Awards $907.6m to Exxon for Venezuelan Assets

An International Chamber of Commerce (ICC) arbitration panel has ruled that Venezuela owes ExxonMobil $907.6m for the assets it took from the oil major in a nationalization drive four years ago. The ruling orders state-owned PDVSA to compensate Exxon, but the Venezuelan oil company will end up paying roughly $255m after taking several deductions. PDVSA will first deduct $191m that Exxon owed in connection with outstanding debt of the nationalized Cerro Negro project, an additional $300m that Exxon managed to freeze in a PDVSA account in New York, and $160m that the tribunal credited to PDVSA, the Venezuelan company says. Exxon officials could not immediately comment. The ruling came far below the $7bn-$10bb that Exxon originally sought as compensation for its nationalized assets. The final outcome for the compensation fight is yet to be decided, however, as Exxon has a pending arbitration case against Venezuela at ICSID, the arbitration unit of the World Bank. Since it took over the assets of foreign oil companies along the Orinoco river belt, PDVSA has argued it would pay only the book value of those assets and not the fair market value that the aggrieved oil companies sought to receive. The ruling comes at a time when Venezuela has stepped up its settlement of pending nationalization compensation payments to affected companies, including Mexican cement maker Cemex and Colombia’s retail chain Exito.