Venezuelan President Hugo Chavez said on Sunday his country would not recognize any ruling by a World Bank tribunal in a multibillion-dollar arbitration case with Exxon Mobil Corp.
Exxon took Venezuela to the World Bank’s International Center for Settlement of Investment Disputes, or ICSID, seeking as much as US$12 billion in compensation after Chavez ordered the nationalization of the Cerro Negro oil project in 2007.
“I tell you now: We will not recognize any decision by ICSID,” Chavez said during a televised speech.
He has repeatedly accused the US oil major of using unfair deals in the past to “rob” the South American OPEC member of its resources.
“They are immoral ... How much could they steal in 50 years? Who would dare launch this madness without any foundation? They wanted [US]$12 billion. From where, compadre?” he said. “We are not going to bow before imperialism and its tentacles, understand that ... They are trying the impossible: to get us to pay them. We are not going to pay them anything.”
An Exxon spokesman said the company had no comment.
Some interpreted the president’s remarks as meaning Venezuela would reject rulings in any of about 20 other cases that it faces before the World Bank’s tribunal, all triggered by a wave of state takeovers in recent years.
They include separate multibillion-dollar proceedings brought by another US oil major, ConocoPhillips.
However, two statements issued later, by Venezuela’s petroleum and mining ministry and by its state oil company PDVSA, only referred to Chavez saying the nation would refuse to recognize a verdict in the Exxon case.
Last week, another arbitration panel, of the International Chamber of Commerce, awarded Exxon US$908 million in a separate case relating to the Cerro Negro nationalization, turning attention to the ongoing World Bank proceedings.
On Saturday, Venezuelan Oil Minister Rafael Ramirez said he did not expect a verdict in Exxon’s World Bank case before the end of this year.
It is due to start being argued next month, Exxon says.
Both cases have been closely watched by the industry for precedents in future disputes between companies and producing states, which have increasingly sought a greater share of oil revenue as prices soar and new reserves become tougher to find.