Venezuela's oil minister said on Saturday he does not expect a ruling in World Bank arbitration with Exxon Mobil this year, after another tribunal awarded the US major $908 million last week. Both cases relate to the nationalisation by President Hugo Chavez of the Cerro Negro heavy oil project in the South American OPEC member, following years of legal wrangling between Exxon and his socialist government.
Last week a panel of the International Chamber of Commerce awarded the US company $908 million, turning attention to ongoing proceedings at the World Bank's International Center for Settlement of Investment Disputes, or ICSID.
That case is due to be argued next month, but Oil Minister Rafael Ramirez said he did not expect a verdict this year. "There is no way it will come out in 2012," Ramirez told Reuters on the sidelines of a visit to Venezuela's vast Orinoco crude belt by Chavez and Peruvian President Ollanta Humala.
The decision in the bigger ICSID case may give guidance for future disputes between energy companies and producing states, which have increasingly sought a greater share of oil revenue as prices soar and new reserves become tougher to find.
Asked about the possibility of a deal in a separate case that Venezuela faces from another US oil giant, ConocoPhillips , Ramirez said: "No. We continue with the arbitration."
On Wednesday, Chavez scoffed at the International Chamber of Commerce (ICC) ruling that Venezuela compensate Exxon, saying the US company should pay Venezuela for "robbing" the country.
For years, he has accused foreign oil companies of plundering the nation's reserves, but has also maintained close ties with many of them. Lawyers consulted by Reuters said the ICC decision only covered a commercial dispute between Exxon and state oil company PDVSA over earnings Exxon lost as a result of the take-over. Exxon says the World Bank case is for compensation for its assets, and experts say it could yield a larger award.
The government has insisted Exxon receive only slightly more than the $750 million it said in invested in the project. Last September, Venezuela offered to settle for $1 billion.
For years, Chavez has confronted oil companies with tax hikes and contract changes aimed at increasing revenue from the industry to fund state-led anti-poverty programs.
Venezuela's push to boost control over its oil industry during the last decade has been followed by similar efforts in other oil-producing nations. Critics say this has slowed foreign investment and left crude production stagnant.
But oil companies remain eager to invest in the Orinoco, which is considered one of the world's largest crude reserves, with US major Chevron and Spain's Repsol signing deals in 2010 for new multibillion-dollar projects.