WASHINGTON, March 9 (NNN-AGENCIES) – A World Bank arbitration panel on Friday ordered Venezuela to pay oil major ConocoPhillips $8.7 billion after taking control of three of its operations in 2007.
It was the latest blow for the once wealthy oil-producing nation, which has seen its economy collapse and has faced other such rulings favoring foreign companies seeking compensation.
The International Center for Settlement of Investment Disputes (ICSID) said compensation for the three facilities “shall be paid together with interest at an annual rate of 5.5 percent, compounded annually, until the date of full and final payment of these amounts.”
ConocoPhillips welcomed the decision which it said reaffirms “governments cannot unlawfully expropriate private investments without paying compensation.”
The ICSID tribunal ruled in 2013 that the expropriation of ConocoPhillips investments in the Hamaca and Petrozuata heavy crude oil projects and the offshore Corocoro development project violated international law.
The decision Friday set the payment amount.
Another international arbitration panel last year ordered Venezuela’s state oil company PDVSA to pay ConocoPhillips $2 billion in compensation for two of the projects.
The Houston-based oil firm’s investments came in the late 1990s when Caracas opened the heavy oil projects in the Orinoco Belt to foreign investment.
PDVSA, once the lifeblood of OPEC-member Venezuela, has seen production plummet in recent years with the collapse of the economy.
President Nicolas Maduro has come under intense international pressure. His rule is being challenged by National Assembly leader Juan Guaido, who Washington and dozens of countries have recognized as the interim leader. — NNN-AGENCIES
