ASSESSMENTS

A $2 Billion Ruling Adds to Venezuela's Woes

May 14, 2018 | 09:00 GMT

A photograph shows the logo of Venezuelan state-owned oil company PDVSA at a gas station in Caracas during November 2017.

Courts may allow ConocoPhillips to take control of key PDVSA assets in the Caribbean, including a refinery and two storage facilities.

(FEDERICO PARRA/AFP/Getty Images)

Highlights

  • Foreign creditors and companies will try to seize Venezuelan oil assets, including export terminals and refineries, as compensation for arbitration claims and missed payments.
  • The seizure of certain Venezuelan energy export assets will cause the country's oil production and export revenue to plummet quickly.
  • Venezuela's tenuous political position will worsen, and some ruling party officials might consider a heavier anti-corruption purge at the state-owned oil company or a negotiation with the United States for a transition of power as ways out of the rising instability.

Old disputes over the nationalization of its oil industry 11 years ago are coming back to haunt Venezuela and further threaten its political stability. In April, an arbitration panel at the International Chamber of Commerce ruled that state-owned Petroleos de Venezuela owed ConocoPhillips $2 billion for seizing the U.S. company's assets in 2007. Complicating matters for Venezuela's energy company, other creditors and private companies are also looking for compensation....

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