ConocoPhillips Says Panel Backs its Case Against Venezuela over Production Reductions

ConocoPhillips Co. (IW 500/2) said an arbitration panel has awarded it $66.8 million in its case against Venezuelan state oil company PDVSA over production reductions.

Conoco said the arbitration court of the International Chamber of Commerce agreed that PDVSA broke contract agreements when it forced Conoco to cut production at its Petrozuata oil operation in 2006-2007 so Venezuela could meet OPEC quota requirements.

"ConocoPhillips can confirm that the ICC tribunal awarded the company $66.8 million in its commercial arbitration against PDVSA," the company said in a statement to AFP.

The production-limits issue predated the Venezuelan government's June 2007 nationalization of the Petrozuata operation, which produces heavy crude from the Orinoco region.

The case ruled on by the ICC tribunal is separate from Conoco's complaint to the World Bank's International Centre for Settlement of Investment Disputes.

Conoco has challenged Caracas's takeover of its 50.1% interest in Petrozuata and minority holdings in two other operations at the ICSID.

ExxonMobil also has challenged the 2007 takeover of its Venezuelan assets at the World Bank tribunal.

But in January, Venezuelan President Hugo Chavez declared that the country no longer would abide by ICSID decisions.

Nevertheless, Conoco said Friday, "We look forward to the pending decision on our expropriation case before ICSID."

Copyright Agence France-Presse, 2012