On Thursday 9 October, a three-member arbitration panel for the conveniently Washington-based International Centre For Settlement of Investment Disputes (ICSID) ordered South American country to pay $1.5 billion to oil giant Exxon for the 2007 expropriation of assets.
Not only has the ICSDID awarded this fine but Venezuela is battling another 20 or so similar cases after the wave of Nationalizations in 2007. This is what happens if a country tries to take back sovereign power over its own assets in the current global situation.
It is what you might call a prime example of what will happen to New Zealand if we sign on to the TPPA and because of this automatically to the International Centre For Settlement Disputes.
The International Centre For Settlement Of Investment Disputes is a member of World Bank Group and receives its funding from the World Bank which in and of itself should get all your warning bells going.
If we where to sign on to the TPPA we would sign on (If we haven’t already somewhere some how) to this institute as well make it neigh on impossible to regulate and own our own assets by our own laws.
An international arbitration panel has ordered Venezuela’s government to pay $1.6bn to oil-giant Exxon Mobil for the seizure of a major oil project in the country, along with other losses.
On Thursday, a three-member arbitration panel for the Washington-based International Centre For Settlement of Investment Disputes (ICSID) unanimously granted the US oil company following the June 2007 expropriation of the Cerro Negro project in Venezuela, a heavy-oil region known as the Orinoco Belt.
It is the largest award yet in a backlog of costly complaints against Venezuela over a wave of nationalisations in the past decade.
However, the panel said the award was warranted as “just compensation” under an international investment treaty signed by Venezuela.
The panel set the figure based on an analysis of future revenues and expenses of the Cerro Negro project that looked at expected oil prices, among other factors.
The ICSID decision against Venezuela follows a January 2012 judgment against state-owned oil firm Petroleos de Venezuela of $750 million by the Paris-based International Chamber of Commerce over the Cerro Negro expropriation.
ExxonMobil had sought some $12 billion after the 2007 seizure, which was followed by a number of toughened commercial terms imposed on foreign oil companies by Venezuela over the multibillion-dollar oil project begun in the 1990s.
‘Exorbitant and completely unjustified’
Venezuela cast the panel’s decision as a victory, noting that the final figure is far below the “exorbitant and completely unjustified” sum ExxonMobil had sought.
The award could still prove difficult for Venezuela to pay as declining oil production, capital flight and 60 percent inflation are depleting the country’s cash reserves.