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ConocoPhillips said on Monday that it had reached a settlement with Venezuela’s state-owned oil firm PDVSA to recover the full US$2-billion amount that an international court awarded it earlier this year for the expropriation of its oil assets in Venezuela a decade ago.
PDVSA has agreed to recognize the International Chamber of Commerce (ICC) ruling and make initial payments of around US$500 million within a period of 90 days from the time of signing, the U.S. oil and gas producer said in a statement. The rest of the amount that the struggling Venezuelan oil company owes to ConocoPhillips will be paid quarterly over a period of four and a half years.
Conoco is owed US$2.04 billion from PDVSA and two of its subsidiaries as a result of the ICC decision in April this year. The ruling was in response to the expropriation of ConocoPhillips’s investments in the Hamaca and Petrozuata heavy crude oil projects in Venezuela in 2007 and other pre-expropriation fiscal measures.
Since the ruling, Conoco has moved to seize PDVSA assets in the Caribbean and has won a court ruling allowing it to depose PDVSA’s U.S. unit Citgo in its aggressive push to enforce the payment of the award.
As a result of the settlement announced today, “ConocoPhillips has agreed to suspend its legal enforcement actions of the ICC award, including in the Dutch Caribbean,” the company said in its statement.
While PDVSA agreed to settle the dispute with Conoco and possibly save some assets in the Caribbean from seizures, Venezuela’s turmoil continues with new economic measures announced by President Nicolas Maduro to curb hyperinflation in the country with the world’s biggest oil reserves.
The massive currency devaluation effective on Monday adds to the confusion and makes Venezuela’s neighboring countries tighten further their border controls to tackle the mass exodus of immigrants who are fleeing from Venezuela’s crisis.
Over the weekend, Brazil deployed more police and troops to Pacaraima, a border town with Venezuela, where local residents attacked migrant camps.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.