Maureen Lorenzetti
Washington Editor
WASHINGTON, DC, July 22 -- Petroleos de Venezuela SA (PDVSA) July 21 said its commercial dispute with Science Applications International Corp (SAIC) should be put before an independent international arbitrator, rather than be subject to White House political pressures.
PDVSA's remarks follow a July 14 decision by the US Overseas Private Investment Corp. to pay a $6 million insurance claim to SAIC. The San Diego, Calif-based company says its assets from an information technology joint venture with PDVSA, called INTESA, were illegally seized by President Hugo Chávez's government in 2002.
OPIC is a US agency that offers financing and political risk insurance to US companies that invest in developing countries.
PDVSA said SAIC did not follow contract obligations that were drafted before Chávez came to power. SAIC, for example, has refused to provide for a certified financial audit of the joint venture's books, PDVSA said.
"This is particularly important because the outside auditors of INTESA have refused to certify the validity of INTESA's financial statements for 2002. PDVSA for its part cannot pay SAIC or any entity based solely on guesswork and unaudited financial data," said Rodolfo Porro, PDVSA general counsel.
Thomas Wilner, outside counsel for PDVSA with the law firm Shearman & Sterling, said OPIC's move was a political decision to satisfy a company with powerful connections to President George W. Bush's administration rather than being based on fact or legal precedent.
"How could OPIC have paid this claim when there has never been a financial audit?" he said.
Wilner said it was unlikely the dispute would be resolved through international arbitration. Instead, a final decision may come if US officials agree to hold bilateral talks directly with Venezuela.
Bush administration officials familiar with OPIC's decision said it was unlikely that the agency would extend new loans to US companies investing in Venezuela because of the SAIC dispute.
But Bernardo Alvarez, Venezeula's ambassador to the US, said US companies have signaled to PDVSA that OPIC's action will not deter what Alvarez suggested are imminent expansion plans by several oil companies.
Alvarez called the SAIC case "an isolated experience" that has no relationship to the actual investment climate in Venezuela.