CARACAS (Reuters) - Venezuela on Thursday scorned a $2.04 billion award to ConocoPhillips (COP.N) over a decade-old nationalization as the U.S. oil producer filed suit in a federal court to enforce the decision.
Venezuelan President Nicolas Maduro’s government called the award a “tough lesson” given it was less than 10 percent of what Conoco originally sought. It also said it may appeal Wednesday’s ruling by the International Chamber of Commerce (ICC) against Venezuela’s state-run oil company PDVSA.
Conoco filed suit on Thursday in the U.S. District court in Manhattan seeking to enforce the award, saying the court had jurisdiction because the ICC arbitration was held in New York and PDVSA had not responded to a demand for payment.
Conoco’s assets in Venezuela were expropriated in 2007 following nationalization of the country’s oil industry led by then-President Hugo Chavez. The firm left the OPEC nation after it could not reach a deal to convert its projects into joint ventures controlled by PDVSA [PDVSA.UL].
The ICC has no means of enforcing its decisions.
“We intend to be aggressive and persistent” in recovering the award, Conoco Chief Financial Officer Don Wallette told investors on a Thursday conference call. “It’s something that’s going to take time to recover, the value that we lost.”
Conoco had sought up to $22 billion from PDVSA for broken contracts and loss of future profits from the Hamaca and Petrozuata oil projects. The agreements with PDVSA contained price formulas that limited the compensation Conoco could claim.
A separate arbitration case by Conoco against Venezuela before the World Bank’s International Centre for Settlement of Investment Disputes (ICSID) introduced in 2007 could result in a final decision later this year, a lawyer close to the case said.
Conoco’s Wallette said the company hopes the ICSID award, which is not subject to price formula limitations, “will represent a full compensation for our value lost.”
The case is Phillips Petroleum Co v Petroleos de Venezuela, U.S. District Court, Southern District of New York, No. 18-cv-3716
Reporting by Girish Gupta in Caracas; additional reporting by Marianna Parraga and Ernest Scheyder in Houston; Writing by Andrew Cawthorne, Editing by David Gregorio and Richard Pullin