NEW YORK (AFP) — US oil giant ExxonMobil said Thursday it has asked for international arbitration as it seeks compensation from Venezuela after it pulled out of the country when the Orinoco fields were nationalized.
In June the government of President Hugo Chavez passed a law forcing multinationals to give at least 60 percent of the capital in their Venezuelan operations to the state-controlled Petroleos de Venezuela SA (PDVSA).
ExxonMobil and Conoco Phillips both refused and withdrew from Venezuela, one of the world's top 10 oil producers and a major supplier to the United States, its biggest customer.
Chavez has said Caracas would pay compensation to the multinational companies based on the book-price for the assets left behind, and not on the current prices on the oil market.
"Following the expropriation of its affiliates' assets in Venezuela in June, ExxonMobil has worked with the Venezuelan government to reach an agreement regarding compensation based on the fair market value of the assets," ExxonMobil spokesman Len D'Eramo said in a written statement to AFP.
"We are disappointed these discussions have not been successful," he said, adding that this "led to our decision to file a request for arbitration with the International Center for Settlement of Investment Disputes (ICSID) on September 6."
The ICSID is an autonomous body within the World Bank which works to resolve disputes between government and foreign private investors.
Venezuela is the only Latin-American member of OPEC, the main oil producers' cartel, and four companies accepted the terms of staying in the country — France's Total, Norway's Statoil, British Petroleum and US company Chevron.
Officially Venezuela produces about three million barrels of oil per day, but the International Energy Agency has given a figure of 2.6 million. About half of the production goes to the United States.
There is an estimated 230 billion barrels of oil in the Orinico fields of which 78 billion are proved.