May 31, 2014 / 12:50 AM / in 4 years

Venezuela to appeal arbitration ruling on Sweeny refinery unit

EL TIGRE, Venezuela May 30 (Reuters) - Venezuela will appeal an arbitration ruling allowing refiner Phillips 66 to acquire state oil company PDVSA’s 50 percent stake in a delayed coking unit at the Sweeny refinery, the oil minister said on Friday.

The 70,000 barrel-per-day coking unit was originally owned by Merey Sweeny LP, a joint venture between PDVSA and Phillips.

But the International Chamber of Commerce’s arbitration panel ruled in April that Phillips 66 could exercise its right to acquire PDVSA’s 50 percent after agreeing with Phillips 66 that PDVSA had violated a supply agreement.

Oil Minister Rafael Ramirez, asked about the issue at a press conference, said, “Yes, of course, we are going to defend ourselves legally.”

The Sweeny refinery in Old Ocean, Texas, was owned by ConocoPhillips until 2012, when it spun off its refining assets through the creation of Phillips 66 as a separate refining company and left ConocoPhillips as an upstream producer.

ConocoPhillips filed an arbitration claim against Venezuela in 2007 at the World Bank’s International Centre for Settlement of Investment Disputes for the takeover of assets, including two heavy crude projects in the Orinoco Belt.

It initially sought $30 billion in compensation, while Venezuela offered to pay only $2 billion. (Reporting by Alexandra Ulmer; Writing by Brian Ellsworth; Editing by Jan Paschal)

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