August 31, 2018 [Tank News International] - ConocoPhillips has entered into a settlement agreement with Petróleos de Venezuela, S.A. (PDVSA), the Venezuelan state-owned oil company, to recover approximately $2bn, the full amount awarded to ConocoPhillips by an arbitral tribunal constituted under the rules of the International Chamber of Commerce (ICC), plus interest through the payment period.
PDVSA has agreed to recognise the ICC judgment and make initial payments totalling approximately $500m within a period of 90 days from the time of signing. The balance of the settlement is to be paid quarterly over a period of 4.5 years.
As a result of the settlement, ConocoPhillips has agreed to suspend its legal enforcement actions of the ICC award, including in the Dutch Caribbean. ConocoPhillips has ensured that the settlement meets all appropriate U.S. regulatory requirements, including any applicable sanctions imposed by the U.S. against Venezuela. Further details of the agreement are confidential.
On April 25, 2018, the ICC tribunal awarded ConocoPhillips approximately $2bn arising out of PDVSA’s failure to uphold its contractual commitments. The award relates to the unlawful expropriation of ConocoPhillips’ investments in the Hamaca and Petrozuata heavy crude oil projects in Venezuela in 2007 and other pre-expropriation fiscal measures. The ICC arbitration award is final and binding upon the parties.
Additionally, ConocoPhillips has a separate and independent legal action pending against the government of Venezuela before a tribunal under the auspices of the World Bank’s International Centre for Settlement of Investment Disputes (ICSID).
The ICSID tribunal has already ruled that Venezuela’s expropriation of ConocoPhillips’ investments violated international law. Proceedings are underway to determine the amount of compensation owed to ConocoPhillips.
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