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International Arbitration Panel awards Exxon $908 Million in Venezuela Dispute (XOM)

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Exxon Mobil CorporationExxon Mobil Corporation (NYSE: XOM) has been awarded $908 million in compensation by an international arbitration panel for Venezuela’s nationalization of assets in 2007. The compensation is less than 10% of what Exxon sought in a dispute that pitted the company against one of the world’s largest oil exporters.

The ruling from the panel is likely to be taken by Venezuelan President Hugo Chavez as a vindication of his confrontation with global oil companies. Chavez, who is a close ally of Cuba’s communist government, has targeted Exxon Mobil in particular, casting it as an icon of global capitalism.


A spokesman for Exxon Mobil today said in en emailed message that the decision by the International Chamber of Commerce confirmed that Venezuela’s state oil company, PDVSA does have a contractual liability to Exxon Mobil. The International Chamber of Commerce has awarded Exxon Mobil $907.588 million.

The arbitration was filed by the oil company back in 2007. The company was seeking as much as $10 billion in compensation for the Cerro Negro project, which is located in the Orinoco heavy oil belt. Chavez had nationalized the Cerro Negro and three other projects in the same area.

Reuters reported that two Venezuelan government sources said that the panel’s decision in the case was favorable to Venezuela. However, they did not disclose the amount the country has been ordered to pay.

In 2007, Exxon Mobil had invested approximately $750 million in the Cerro Negro heavy crude project. The project has been renamed as PetroMonagas following the nationalization.

Exxon Mobil shares finished 0.60% lower at $84.76 in the final trading session of the year on Friday.

Exxon Mobil shares gained nearly 16% in 2011.

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edliston
Post Written By: Ed Liston

Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.


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Ed Liston

Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing.

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