Exxon’s Claims in Venezuela Get Chopped (XOM, COP, CVX, TOT, STO, BP)

In 2007, the Venezuela government expropriated the Cerro Negro project owned by Exxon Mobil Corp. (NYSE: XOM) after the US oil giant refused to take a minority stake in the project. ConocoPhillips (NYSE: COP) also refused to take a reduced stake in its projects. Chevron Corp. (NYSE: CVX), Total SA (NYSE: TOT), Statoil ASA (NYSE: STO), and BP plc (NYSE: BP) agreed to the new restrictions on foreign ownership and remained in the country.

An international tribunal has now ruled that Venezuela must pay Exxon $908 million in compensation, far less than the $7 billion Exxon sought after cutting its original demand from $12 billion. Venezuela will actually pay about $255 million in cash because it is being allowed to reduce its payment by forgiving debt.

Exxon has also filed a complaint in another international tribunal and that case is expected to be argued in February. No ruling has been issued on Conoco’s claims, but Venezuela’s oil minister said in November that the country would pay a total of about $2.5 billion to settle both claims.