ConocoPhillips will recover from Petroleos de Venezuela SA (PDVSA) the $2 billion awarded by an arbitral tribunal constituted under the rules of the International Chamber of Commerce (ICC), plus interest, following a settlement agreement.
PDVSA has agreed to make initial payments totaling $500 million within 90 days. The balance is to be paid quarterly over 4½ years.
As a result, ConocoPhillips will suspend its legal enforcement actions of the ICC award, including in the Dutch Caribbean. The settlement meets appropriate US regulatory requirements, including any applicable sanctions imposed by the US against Venezuela, ConocoPhillips said.
Additional details are confidential.
On Apr. 25, the ICC tribunal awarded ConocoPhillips $2.04 billion after PDVSA failed to uphold its contractual commitments. The award applies to contracts ConocoPhillips had with PDVSA and two of its subsidiaries in the Hamaca and Petrozuata heavy crude oil projects expropriated by the government and to fiscal changes enacted before the nationalizations in 2007 (OGJ Online, April 26, 2018).
The company also has won a ruling from a tribunal acting under auspices of the World Bank’s International Center for Settlement of Investment Disputes that expropriation of its assets violated international law.
The amount of compensation under that ruling will be determined by proceedings still in progress.