A World Bank arbitration tribunal has dismissed a request by Venezuela to annul a $8.37 billion arbitration award to ConocoPhillips, clearing the way for the U.S. producer to reclaim compensation for the expropriation of its oil assets in the South American country.
The International Centre for Settlement of Investment Disputes (ICSID) declared the expropriation 'unlawful' and in 2019 awarded billions of dollars in compensation to Conoco - the largest amount ordered to be paid to a foreign firm after late President Hugo Chavez' nationalization wave.
But Venezuela later introduced an amount rectification request and an annulment request.
"Venezuela's applications to annul the award are dismissed," the court said in its decision, ordering Venezuela to bear its own legal fees, cover $1.35 million in annulment proceeding costs, and pay Conoco $6.46 million for legal expenses.
ICSID's decision on the annulment, seen by Reuters on Thursday, was communicated to the parties this week, according to the court's webpage.
Venezuela might have exhausted all legal avenues to stop that arbitration ruling from being enforced, lawyers said.
"ConocoPhillips is pleased with yesterday's decision from the ICSID annulment committee. The decision upholds the principle that governments cannot unlawfully expropriate private investments without paying compensation," Conoco said in an email.
Venezuela's communication ministry did not immediately reply to requests for comment.
Conoco brought the arbitration before ICSID in 2007 after Chavez' government took over three oil projects where the company had stakes - Petrozuata, Hamaca and Corocoro.
Following two victories at international arbitration courts over Venezuela and its state-owned company PDVSA, Conoco has in recent years tried to seize Venezuelan assets overseas.
The firm last year asked a court in Trinidad and Tobago to seize payments to Venezuela from joint offshore gas projects.
"We remain committed to pursuing all available legal avenues to protect our rights and obtain a full and fair recovery of the awards," Conoco added in the email.
Conoco also is the largest claimant in a high-profile case in the U.S. federal court of Delaware.
In that case, 18 companies which were defaulted or whose assets were expropriated in Venezuela are seeking to cash up to $21.3 billion from an auction of shares in the parent of Venezuela-owned refiner Citgo Petroleum, the country's crown jewel.
The auction is set to restart bidding this year, after a $7.3 billion conditional offer selected by a court officer overseeing the sale process was rejected by most creditors, including Conoco.
(Reuters - Reporting by Marianna Parraga, additional reporting by Julia Symmes-Cobb, Editing by Franklin Paul and Jan Harvey)