Published On: Mon, May 14th, 2018

Court of Justice rules in favor of ConocoPhillips seizing Venezuelan oil assets

Court houseWILLEMSTAD - The Court of Justice in Curaçao has authorized the local subsidiary of U.S. oil giant ConocoPhillips to seize $636 million worth of assets held on the island by Venezuela’s state oil company, PDVSA.

The move comes as Houston-based Conoco seeks to recover $2 billion in a decade-old dispute over the expropriation of its Venezuelan oil projects by the OPEC nation’s socialist government, which is struggling with an economic crunch that has caused widespread shortages of food and medicine.

Curaçao Economy Minister Steve Martina said at a news conference Sunday that Conoco already had taken control of some oil products at the Isla Refinery, though he did not specify how much.

The court’s ruling of May 4 is a blow to Venezuela, which uses the refinery and tank installations in Curaçao and elsewhere in the Dutch Caribbean to store a significant portion of the oil it exports to its three main foreign markets — China, the U.S. and India.

According to the ruling, the company can seize all oil products stored at the oil refinery and the Di Korsou refineries in Curaçao. The court also said Conoco can take over any crude oil shipments en route from Venezuela to the island that are within 19 kilometers (12 miles) of the coast.

Venezuela holds the world’s largest underground oil reserves but production has declined under nearly two decades of socialist leadership, casting the once-wealthy nation deep into political and economic crisis.

An arbitration panel under the International Chamber of Commerce in late April found that Venezuela under the leadership of then-President Hugo Chavez in 2007 illegally expropriated joint venture operations with ConocoPhillips.

The firm turned to a local court to collect the award, but the petition spelling out its demands has not been made public. The $2 billion award represents the equivalent of more than 20 percent of the cash.

Click Tag(s) for Related Articles: