Exxon wins $908m from Venezuela in oil dispute

Oil giant Exxon Mobil has won $908m (£586m) from an arbitration panel after the nationalisation of its Venezuelan oil project in 2007. However, this is less than 10% of what the oil giant had reportedly sought. The International Chamber of Commerce (ICC) in Paris set the award, ruling that Venezuela's state oil company, PDVSA, did have liability to Exxon after its assets were nationalised. The award is less than the $1bn Venezuela offered in September. Exxon had reportedly sought $10bn in compensation for the nationalisation of its heavy crude upgrading project in Venezuela's oil rich Orinoco belt. Future cases It is one of many arbitration cases currently under consideration after Venezuelan President Hugo Chavez ordered the nationalisation of the assets of some oil companies including Exxon and Conoco Phillips. "They must be elated that they got off so cheap. It's certainly a happy new year for Venezuela," said Russ Dallen at Caracas Capital Markets. The decision was made by an arbitration tribunal at the ICC. Under the rules of the arbitration, its decisions are binding. Exxon will hope for a better result in the next case concerning the nationalisation of its Cerro Negro heavy oil project, which is being heard by a different arbitration panel. Much of Venezuela's so far untapped reserves are harder-to-process heavy oil, and the Venezuelan government has been keen to increase state revenues from these reserves. Analysts have said the country's aggressive nationalisation strategy may have deterred foreign investors and limited oil production. But despite the moves, which saw Exxon and Conoco Philips leave the country, other oil firms have continued to invest . In 2010, US firm Chevron and Spain's Repsol signed investment deals to exploit resources in the country's Orinoco belt.