Venezuela failed to fairly compensate ConocoPhillips for its seizure of three crude oil projects in 2007, according to a ruling from a World Bank arbitration panel.
The International Centre for Settlement of Investment Disputes in Washington concluded in a ruling issued Tuesday that Venezuela “breached its obligation to negotiate in good faith.”
The panel has not yet determined what Venezuela owes ConocoPhillips.
Conoco invested in three Venezuela oil exploration and production projects under a framework established by the country in the early 1990s to encourage development, the company said in a statement. The projects were expropriated in 2007, and Conoco soon initiated arbitration before the ICSID.
Conoco’s general counsel Janet Langford Kelly said in a statement that the company welcomes the decision. “This ruling sends a clear message,” she said.
Venezuelan Energy Minister Rafael Ramirez disagreed.
“We reject this ruling that we did not negotiate on good faith,” Ramirez said, speaking on state television Wednesday.
Ramirez said that he met with Conoco representatives on at least three occasions to attempt to reach an agreement on compensation.