A World Bank tribunal ruled on Thursday that Venezuela should pay US supermajor ExxonMobil some $1.6 billion in compensation for assets expropriated in 2007.
The award is far below the amount of up to $10 billion Exxon had originally sought and also the $6 billion at which the International Centre for Settlement of Investment Disputes (ICSID) capped the case, excluding a tax claim, Reuters reported.
The decision from the International Centre for Investment Disputes apportioned $1.411 billion for seized assets at the Cerro Negro project.
It also awarded compensation of $179.3 million for seizures at the La Ceiba project and $9 million for production and export curtailments at Cerro Negro.
A separate decision by the Paris-based ICC in 2012 ordered Venezuela state oil company PDVSA to pay ExxonMobil $908 million.
There will be no double compensation for the nationalization of the large heavy crude project in the Orinoco region, the tribunal added.
“The Tribunal takes note in both cases of the Claimants’ representation that, in the event of favourable award, the Claimants are willing to make the required reimbursements to PDVSA. Double recovery will thus be avoided,” the ICSID award said.
Still, the decision comes at a bad time for cash-strapped Venezuela, which is already struggling with an economy widely seen as in recession, rampant inflation, and looming bond payments.
Venezuela has the option of seeking to annul the decision. It is unlikely the award will be nullified, but the move would likely buy Venezuela some time and potentially allow for parallel negotiations.