Venezuela expects oil arbitrations in the second half of 2013
"We don't expect resolutions this year. Probably the biggest cases (Conoco and Exxon) will be resolved in the second half of 2013," Oil Minister Rafael Ramirez remarked
Exxon Mobil and ConocoPhillips demand USD 40 billion in compensations from the Venezuelan Government, yet Venezuela looks forward to paying a small portion of it.
Venezuela faces 20 cases filed with both the International Arbitration Court of the International Chamber of Commerce and The World Bank's International Centre for Settlement of Investment Disputes (Icsid), after it set off a wave of state takeovers.
"We don't expect resolutions this year. Probably the biggest cases (Conoco and Exxon) will be resolved in the second half of 2013," Oil Minister Rafael Ramírez remarked.
Venezuela's large number of compensation cases are being closely watched by the global oil industry as the imminent resolutions may set a precedent in future disputes involving producer states, which amid high oil prices lay down tougher conditions to foreign companies.
Industry analysts reckon Venezuela will end up paying USD 7-9 billion, which is less than what the companies expect, but more than what the Venezuelan Government seeks to pay (USD 2.5 billion). Analysts' estimates are based on the market value of the assets at the time of nationalization.
Translated by Jhean Cabrera
President Nicolás Maduro is not only the heir to the throne, but also to an economic crisis which demanded urgent measures to rectify the course. The crisis showed up in two aspects: a 50% inflation estimate, and shortage of staples ranging between 70% and 98%. These issues might hit the President's poor popularity; considering his feeble electoral victory of 1% over his challenger.