Venezuela says to pay less than $1 billion to Exxon over nationalization

Fri Oct 10, 2014 5:12pm EDT
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By Andrew Cawthorne and Diego Ore

CARACAS (Reuters) - Venezuela will end up paying less than $1 billion to Exxon Mobil Corp (XOM.N: Quote) for oil assets nationalized in 2007, after this week's World Bank tribunal award, the Venezuelan government said on Friday.

Venezuela says it will deduct a previous award made against it by another international tribunal, the Paris-based International Chamber of Commerce (ICC), from Thursday's $1.6 billion ruling by the World Bank's ICSID body. "In concrete, exact terms, our republic will have to cancel something less than $1 billion, that is to say 5 percent of Exxon Mobil's pretentions against our country," said Ramirez, who until a cabinet reshuffle several weeks ago, was head of the oil ministry and state oil company PDVSA.

A senior PDVSA source told Reuters on Thursday that the company would pay the compensation ordered after November.

Exxon received $908 million from PDVSA in 2012 after a separate decision by the ICC over the same claim, but had been seeking far more overall.

"We're ready. We have no problem finishing up this determination and closing this chapter that became a menace to the economy of our nation," Ramirez added at a news conference.

The case relates to the 2007 takeover of a large heavy crude project in the Orinoco region by then president Hugo Chavez's socialist government.

Venezuela is hailing the outcome as a victory for its sovereignty over rapacious Western multinationals, and oil workers were shown celebrating on state TV on Friday.

Exxon, though, has also expressed satisfaction, saying the decision vindicated its view it had not been properly compensated.   Continued...

The Exxon corporate logo is pictured at a gas station in Arlington, Virginia January 31, 2012. REUTERS/Jason Reed