Tag Archives: ExxonMobil

Jan
6
2012
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In Case You Missed It… Articles Roundup Week of 1/6/12

In this week’s roundup…ICSID rules on ExxonMobil’s arbitration claim against Venezuela; Inflation tops 27% in 2011 in Venezuela, while experts warn that President Chávez’s election-year spending spree may make that number even higher in 2012; Chávez continues his “Gold Rush;” Venezuela’s inability to develop its natural gas industry will result in more imports; and The Economist urges Chávez to come clean about his health.

Panel Deals a Setback to Exxon in Venezuela, The Wall Street Journal

An international arbitration panel awarded Exxon Mobil Corp. about $908 million in a verdict over oil assets nationalized by Venezuelan President Hugo Chávez in 2007, the company said late Saturday.

The payout was substantially lower than the $7 billion that Exxon was seeking in restitution and is likely to be a boon for Venezuela’s leftist government, which in recent years has embarked on a nationalization campaign to centralize control over key economic sectors. State oil company Petróleos de Venezuela SA said Monday it will pay Exxon a total of $255 million—after subtracting existing debt—over the next 60 days.

Heavy spending by Chavez in election year could boost 27 percent inflation in Venezuela, AP

President Hugo Chavez’s government is likely to spend heavily this year to rev up the economy during his re-election bid, and that could worsen one of Venezuela’s biggest problems: 27-percent annual inflation that is already close to the highest in the world. Chavez has started ramping up spending ahead of the October vote, and economists warn that more money injected into the economy will jolt prices. The government predicts 22 percent inflation in 2012, but the investment bank Barclays Capital projects that it could top 36 percent.

Venezuela to Leave 15 Tons of its Gold Reserves in Foreign Banks, Bloomberg

Venezuela will leave 15 tons of gold reserves in banks outside the country, Central Bank president Nelson Merentes said today. Venezuela held about 211 tons of its gold in Europe, Canada and Switzerland before it started repatriating the reserves last year, Merentes said on national radio. “It wasn’t necessary to have that much gold abroad for financial transactions,” Merentes said. “We’re going to keep bringing it back. Soon we will have the majority of our reserves in the Central Bank vault.”

Development problems force Venezuela to extend natural gas imports, Platts

Venezuela’s inability to develop its natural gas industry as planned has forced it to revise and extend a deal with Colombia’s state-controlled Ecopetrol and Chevron involving gas imports from the partners’ Guajira gas field in northeastern Colombia, a Caracas-based consultant said Wednesday.Since a 225-km binational gas pipeline was inaugurated in late 2007, Ecopetrol and Chevron have exported up to 250 million cubic feet of gas daily to mainly industrial clients in and around Maracaibo in western Venezuela’s Zulia state. Shipments in recent months have averaged 200 million cubic feet per day.

Cancer and the body politic, The Economist

Even by the standards of one of the world’s great conspiracy theorists, it was wacky stuff. On hearing the news that Argentina’s Cristina Fernández had become the fifth left-of-centre Latin American leader to be diagnosed with cancer in the past three years, Venezuela’s Hugo Chávez, himself unlucky enough to be one of them, mused that the United States might have developed technology to “induce cancer” in its political foes. “I don’t want to make any reckless accusation,” Mr. Chávez said disingenuously, “but it’s very, very, very strange.”

 

 
Sep
30
2011
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In Case You Missed It… Articles Roundup Week of 9/30/11

In this week’s roundup… Settlement talks between U.S. companies and Chávez government over expropriated assets are unlikely, as two more American firms file arbitration claims against Venezuela before the World Bank’s International Center for Settlement of Investment Disputes (ICSID); Meanwhile, the Venezuelan government announces yet another expropriation; Chávez strikes out with Major League Baseball; Venezuela’s prisons are among the most dangerous in the continent; and Chávez tries to silence rumors about his health in his usual flair.

Venezuela Again Rejects Oil Settlement Talks, The Wall Street Journal

Venezuelan Oil Minister Rafael Ramirez on Tuesday rejected talk that his government was planning to settle with companies like Exxon Mobil Corp. and ConocoPhillips outside of official arbitration proceedings for compensation for projects nationalized by President Hugo Chavez nearly four years ago.

Helmerich Sues Venezuela Over Seized Drilling Rigs, The Wall Street Journal

Helmerich & Payne  Inc. has filed a lawsuit against Venezuela over the 2010 government takeover of 11 drilling rigs belonging to the Oklahoma-based oil-services company.

Owens Illinois hits Venezuela with arbitration claim, Reuters

U.S. bottle maker Owens Illinois (OI.N) has filed a claim for arbitration against Venezuela at a World Bank tribunal after President Hugo Chavez nationalized its operations in October last year.

US glass container maker Owens-Illinois seeks arbitration in Venezuela expropriation dispute, The Washington Post

U.S.-based glass container manufacturer Owens-Illinois Inc. said Wednesday it is seeking international arbitration in a dispute with Venezuela over the expropriation of two factories in the South American nation.

Chavez orders nationalization of ferry company, The Associated Press

President Hugo Chavez has ordered the nationalization of Venezuela’s largest ferry company. Chavez says the company, Conferrys, has failed to upgrade its vessels, causing delays and poor service from the eastern city of Puerto La Cruz to Margarita Island.

Venezuela gov’t strikes out with big league, Reuters

Baseball and President Hugo Chavez are both popular in Venezuela, but uncertainty about his policies is prompting major league teams to stop investing here while developing their Dominican Republic training camps.

Guillen says he’s no fan of Chavez, The Associated Press via The Sacramento Bee

Ninety minutes into Ozzie Guillen’s first media session as manager of the Florida Marlins, the subject turned to politics – specifically, fellow countryman Hugo Chavez.

Venezuela’s Prison Chief Says No New Facilities Needed, The Wall Street Journal

The head of Venezuela’s recently created prison ministry, which was formed earlier this year in the wake of a bloody inmate riot at a notoriously overcrowded facility, said in an interview published Tuesday that building more prisons is not necessary. “

Hugo Chávez tries to silence health rumors with his usual flair, The Christian Science Monitor

Hugo Chávez assembled reporters to his palace and played ball, after a Miami-based newspaper suggested the spirited Venezuelan President was on his last legs.

 

 
Sep
28
2011
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Venezuela Signals It Won’t Comply With Arbitration Decisions

Government moves to make it harder for nationalized foreign companies to receive compensation

Faced with the specter of losing multiple arbitration claims brought forth by American and other companies for not being compensated for property expropriated by the Venezuelan government, Venezuelan Oil Minister Rafael Ramirez said this week the country will not comply with penalties imposed by any international judicial entity in issues pertaining to the Chavez government’s nationalizations.  The position taken by the Chavez administration would put the country at odds with the International Center for Settlement of Investment Disputes (ICSID), posing a serious concern for the 18 companies which currently have open cases against the oil producing country for assets seized by the Chávez administration.

The announcement follows recent developments in the ICSID arbitration case regarding two U.S. companies, Exxon Mobile and ConocoPhillips, whose assets were nationalized by the Venezuelan government. According to news reports, Venezuela could be asked to pay a combined sum of around $40 billion for losses endured by the two U.S companies. However, the Venezuelan government has made it clear that they are only willing to pay $2.5 billion. Oklahoma based oil services company, Helmerich & Payne, has also filed a law suit against Venezuela over the 2010 government takeover of 11 of the company’s drilling rigs.

In a separate statement Minister Ramirez declared that PDVSA will move to avoid having any assets abroad so as to protect the company from the multiple threats from international arbitration cases it is facing.  Such a move would make it harder for foreign companies that are found to have been wronged and not compensated by the Venezuelan government to receive restitution for their losses.

Boris Segura, an analyst at Nomura Securities, states: “Coupled with the recent announcement of the repatriation of gold holdings and the move of international reserves out of the US and Europe, this confusion about the arbitration claims does not look positive for Venezuela’s willingness to pay”

The apparent unwillingness of the Chávez administration to honor arbitration rulings paints a bleak picture for all who have outstanding arbitration against Venezuela. The harshest consequences of these actions, however, will be borne by the Venezuelan people, who continue to see a dramatic drop in foreign investments in their country.