Venezuela’s PDVSA May Pay Exxon $3.7 Billion, Barclays Says

By Daniel Cancel and Nathan Crooks - Apr 13, 2011 2:13 PM

Petroleos de Venezuela SA may have to pay $3.7 billion in compensation to Exxon Mobil Corp. (XOM), the world’s largest oil company, for assets nationalized by Venezuelan President Hugo Chavez in 2007, according to an estimate by Barclays Capital analysts.

A settlement is expected soon from the International Chamber of Commerce in New York, known as the ICC, Barclays analysts Alejandro Grisanti and Alejandro Arreaza wrote in a report today. The World Bank’s International Centre for Settlement of Investment Disputes, or ICSID, is also expected to rule on a case later in the year, the analysts said.

PDVSA will have to fulfill the terms of any settlement “sooner rather than later,” the analysts wrote.

Chavez, who has nationalized assets in the energy, metals, cement and telecommunications industries, faces 16 arbitration cases at the ICSID, according to the Washington-based center’s website. Venezuelan Oil Minister Rafael Ramirez has said that a ruling below $2.5 billion in the Exxon case would be a “victory for the country,” according to the report.

Exxon, the world’s largest oil company by market value, cut the amount it is seeking from the Caracas-based state company last year to $7 billion from $12 billion.

Barclays expects a ruling later this year for Houston-based ConocoPhillips (COP), which also filed a case against Venezuela in the ICSID and the ICC because of nationalized assets.

To contact the editor responsible for this story: Daniel Cancel in Caracas at dcancel@bloomberg.net; Nathan Crooks in Santiago at ncrooks@bloomberg.net

To contact the editor responsible for this story: Dale Crofts at dcrofts@bloomberg.net

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