Venezuela to pay Exxon Mobil $255 million after arbitration decision

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CARACAS, Venezuela — Venezuela said Monday it has successfully defended itself in an international arbitration case brought by Exxon Mobil Corp. and will need to pay only $255 million of the more than $900 million awarded to the company.

State oil company Petroleos de Venezuela SA, or PDVSA, said in a statement that debts and court action reduce what it owes under decision by the International Chamber of Commerce, which awarded Exxon Mobil more than $907 million in compensation.

It noted that Exxon Mobil had previously used international courts to freeze about $300 million in Venezuela’s U.S. accounts and that the company also has a debt of $191 million relating to financing of an oil project in the country, in addition to $160 million that the arbitration tribunal said was due to PDVSA.

PDVSA called it a “successful defense” and said Exxon Mobil had initially demanded about $12 billion in compensation while pursuing two international arbitration claims.

Exxon Mobil sought arbitration after President Hugo Chavez’s government nationalized an oil project in the country in 2007.

Exxon Mobil said the tribunal had credited $160.6 million in debt against the award.

“The remaining $746.9 million could be paid through a combination of approximately $305 million in PDVSA funds already held for this purpose by New York courts, PDVSA’s cancellation of additional project debt owed by Exxon Mobil and payment of additional cash,” company spokesman Patrick McGinn wrote in an e-mail.

Exxon Mobil still has another arbitration case pending against Venezuela before the World Bank-affiliated International Centre for Settlement of Investment Disputes, or ICSID.

McGinn said the latest arbitration award “represents recovery on a limited, contractual liability of PDVSA.” He said the larger ICSID arbitration against the government of Venezuela is ongoing and is expected to be argued in February.”

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