ExxonMobil seeking arbitration for Cerro Negro

Eric Watkins
Senior Correspondent

LOS ANGELES, Sept. 13 -- ExxonMobil Corp. last week filed a request for arbitration over Venezuela's nationalization of the Cerro Negro heavy oil project.

The firm, which filed the arbitration request with the International Center for Settlement of Investment Disputes, held a 41.67% interest in the project before Venezuela expropriated it in June.

The appropriation resulted from a nationalization decree issued by Venezuela's President Hugo Chavez earlier this year.

Venezuela took majority control of country's privately run oil projects on May 1 and gave the companies until June 26 to decide to accept new terms as junior partners.

ExxonMobil and ConocoPhillips rejected the offer, while Chevron Corp., BP PLC, Total SA, and Statoil ASA accepted.

Last week, Venezuela's tax authority Seniat said it had received or been promised payments from two state-dominated joint venture firms after imposing large back-tax bills on recently nationalized heavy oil development projects, including Cerro Negro (OGJ Online, Sept. 6, 2007).

Contact Eric Watkins at hippalus@yahoo.com.

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