Washington: A World Bank arbitration panel ruled on Friday that Venezuela must pay US oil giant ConocoPhillips more than 8 billion as compensation for a decade-old expropriation dispute, roughly the same amount as the South American country’s foreign currency reserves.
The bank’s ICSID tribunal had ruled in 2013 that the 2007 expropriation of ConocoPhillips investments in two heavy crude oil projects violated international law. “We welcome the ICSID tribunal’s decision, which upholds the principle that governments cannot unlawfully expropriate private investments without paying compensation,” said Kelly B. Rose, senior vice president, Legal, General Counsel and Corporate Secretary of ConocoPhillips.
The law firm Curtis, Mallet-Prevost, Colt & Mosle LLP, which represented Venezuela before the panel, did not immediately respond a request for comment.Collecting the money may be difficult as the Venezuelan economy has shrunk more than half since 2013 and sanctions by the Trump administration barring U.S investors from lending money to the government complicate President Nicolas Maduro maneuvering.
Venezuela faces around 20 arbitration cases at the World Bank, more than any other country in the world, with potential losses stretching into the billions.
The Venezuelan government and its state-owned entities currently owe around 150 billion to creditors around the world, while the country’s foreign currency reserves have fallen to just 8 billion.