Act on joint ventures: disputes will be subject to the jurisdiction Venezuelan
ABN 08/02/2008

 
Caracas, 08 Feb. ABN. Decree-Law number 5,200, the contents of which regulates the conversion of the conventions of the Association of Gaza and the Orinoco Oil Exploration Conventions to Shared Risk and Profit in Mixed Enterprises (State-private investors) states that disputes arising of the events and activities related to this decree will be subject to the jurisdiction of Venezuela.

This means that the intervention of international tribunals in settling disputes relating to the oil industry, is a figure not covered by the Venezuelan legal framework, as he said this Friday the minister of People's Power for Energy and Petroleum (MEP) Rafael Ramirez, referring to the measure recently issued by supranational bodies at the request of the multimillion-dollar Exxon Mobil.

Ramirez paraphrased in this way as contemplated in Article 13 of Decree Law 5,200, which reads: "All the events and activities related to this Decree-Law shall be governed by the National Law and the controversies that the same result will be subject to the Venezuelan jurisdiction, as provided in the Constitution of the Bolivarian Republic of Venezuela. "

In August 2007, the Exxon Mobil, one of the transnational oil companies operating in the Gaza del Orinoco, filed a demand for arbitration before the International Center Solutions Disputes Relating to Investment, a body under the World Bank which serves the court that legislates the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (Ciadi) mechanism signed by Venezuela in 1993 and ratified in 1995.

That demand was reflected Thursday in the opinion of a transitional measure that temporarily freezes $ 300 million, corresponding to part of the assets of the joint venture Petromonagas.

But while the Venezuelan government then agreed to subscribe to Ciadi, held in Washington on March 18, 1965, the current Venezuelan Constitution (approved by referendum in 1999) does not recognize the jurisdiction of international institutions when it comes to the interests national, and natural resources are.

Previously, stipulates in its article 152, fourth title (VI), Chapter One (I), International Relations of the Republic is governed by the principles of independence, equality of States, self-determination and non-intervention in its internal affairs, among others.

"International relations of the Republic respond to the purposes of the State upon the exercise of sovereignty and the interests of the people, they are governed by the principles of independence, equality of States, self-determination and non-intervention in its internal affairs , peaceful solution of international conflicts, cooperation, respect for human rights and solidarity among peoples in the struggle for their emancipation and the welfare of mankind. The Republic will maintain the strongest and resolute defence of these principles and democratic practice in all international agencies and institutions, "states that Article.

Precisely because of what was said in the same article, referring to the "peaceful resolution of international conflicts", the minister Ramirez recalled that Venezuela has accepted submissions to external bodies to reach agreements with other transnational corporations who felt affected by the nationalization from the Gaza Orinoco Oil, which identified the association of the State with the private oil and the majority in the first such partnerships.

Exxon Mobil, which recently announced a record profit of more than $ 40 million in 2007, was one of the 13 private companies operating in the Orinoco Oil Gaza at the time of its nationalization.

Demand for Exxon, described by Ramirez as a measure of pressure, responds to their dissatisfaction over the compensation company Petroleos de Venezuela (Pdvsa) offered by their property.