Venezuela-Exxon arbitration case moves ahead

Venezuela's oil minister said Friday the government is pleased with an international panel's decision that he said limits the scope of an arbitration case filed by Exxon Mobil Corp.

Exxon Mobil, however, said it was encouraged the International Center for Settlement of Investment Disputes, an arbitration body linked to the World Bank, decided to hear the case.

Oil Minister Rafael Ramirez said the arbitration body ruled Thursday that it would consider only the period starting in 2006, not earlier as sought by Exxon Mobil. The decision means potential amounts obtainable by Exxon Mobil are reduced, Ramirez said in comments reported by the state-run Bolivarian News Agency.

The arbitration case was brought by the Irving, Texas-based Exxon Mobil in 2007 over Venezuela's nationalization of the Cerro Negro heavy oil project. Exxon Mobil also sought to recoup increased royalties and taxes imposed by President Hugo Chavez's government starting in 2004.

Exxon Mobil's oil project was one of four taken over by Chavez's government in May 2007 as he brought the oil industry under majority state control.

"We are encouraged by the jurisdictional decision of the International Center for Settlement of Investment Disputes," said Patrick McGinn, an Exxon Mobil spokesman. "This is the proper forum to hear the merits of our case."

He added that the company is still open to holding talks with Venezuela about the case.

"While we continue arbitration proceedings to recover compensation for the Venezuelan government's actions, we remain willing to engage in substantive discussions directly with the Venezuelan government on the issues," McGinn said.