OPIC refutes PDVSA complaints over INTESA claim

Aug. 2, 2004
The Overseas Private Investment Corp (OPIC) July 23 disputed charges by Venezuela's state-owned oil company Petróleos de Venezuela SA (PDVSA) that the US agency's decision to pay out a $6 million risk insurance claim to information technology contractor Science Applications International Corp. (SAIC) was politically motivated.

The Overseas Private Investment Corp (OPIC) July 23 disputed charges by Venezuela's state-owned oil company Petróleos de Venezuela SA (PDVSA) that the US agency's decision to pay out a $6 million risk insurance claim to information technology contractor Science Applications International Corp. (SAIC) was politically motivated.

An OPIC spokesperson characterized PDVSA's most recent accusations made at a July 21 press conference in Washington, DC, as untrue, calling the statements by PDVSA's legal team "a smokescreen" designed to obfuscate the facts behind the case.

OPIC officials specifically refuted PDVSA's assertion that SAIC did not follow the terms of its contract to conduct an independent audit of the PDVSA-SAIC joint venture INTESA.

"That is totally false," OPIC spokes- man Larry Spinelli said.

Tom Wilner, outside counsel for PDVSA in the dispute, said July 23 he stood by his July 21 comments that an independent audit of the JV never was conducted (OGJ Online, July 21, 2004).

Wilner, partner in Shearman & Sterling LLP law firm, also asserted that OPIC's July 12 decision was not properly vetted to the agency's board.

Expropriation charged

OPIC has countered that its determination that PDVSA expropriated SAIC assets was a carefully prepared analysis that came only after a year of talks between the two parties was unsuccessful.

Wilner said PDVSA still is studying OPIC's decision and will respond to the agency shortly. Legal experts anticipate that the case likely will be discussed bilaterally between the two countries rather than through an international arbitration panel.

OPIC's July 12 memorandum said SAIC's insurance claim was valid; it noted the Venezuelan military seized INTESA operations and blocked employees' access when the country was in the middle of a general strike in late 2002.

Venezuelan President Hugo Chávez, according to OPIC, could not prove his claim that he had to take over INTESA because it was being sabotaged by antigovernment sympathizers within the company.

About 18,000 of PDVSA's workforce of 33,000 either left the company or were dismissed for participating in the strike, according to OPIC.

But the agency found no evidence to support the sabotage allegations, noting that "the record in this case is voluminous, compromising hundreds of pages of letters and e-mail exchanges between and among INTESA and PDVSA personnel, as well as technical support logs and daily reports made in December 2002 and January 2003 by INTESA personnel."