US oil company ConocoPhillips said Wednesday it was awarded $2 billion in an arbitration decision against Venezuela's state oil company PDVSA over the 2007 government takeover of two of the company's units.
The arbitration court of the International Chamber of Commerce ruled PDVSA violated the contracts in the "unlawful and uncompensated expropriation" of ConocoPhillips' investments in the Hamaca and Petrozuata heavy crude oil projects in the South American nation, the company said in a statement.
At the time the assets were taken, the two oil projects were bringing in $1 billion a year in net profits for the firm and producing 300,000 barrels of oil a day, the Wall Street Journal reported, citing people familiar with the matter.
The company said it would pursue payment "to the full extent of the law," but it seems unlikely the cash-strapped government of President Nicolas Maduro will pay when it has defaulted on bond payments.
The country is mired in a severe economic downturn as oil production has plummeted, and a worsening humanitarian crisis that has driven tens of thousands of Venezuelans flee the country.
Exxon Mobil also has filed cases against Venezuela.
The ICC arbitration is a separate from investment treaty arbitration against the government of Venezuela, which is pending before the World Bank's International Centre for Settlement of Investment Disputes (ICSID).
The ICSID tribunal already ruled that the expropriation violated international law, and proceedings are currently ongoing to determine the amount of compensation owed.
