Venezuela has to pay the oil company ConocoPhillips $ 8 billion in compensation in a ten-year rights conflict, according to the World Bank Arbitration Court.
World Bank Arbitration Court ICSID has decided that Venezuela broke international law when they took over two oil projects belonging to ConocoPhillips in 2007.
The sum is as large as the South American country’s foreign exchange reserves and corresponds to slightly less than NOK 70 billion after the current exchange rate.
Kelly B. Rose in ConocoPhillips says they are happy with the outcome of the decision.
“It maintains the principle that governments illegally cannot take over private investment without paying compensation,” she says.
In 2007, all privately run oil fields in Venezuela were taken under state control. All oil companies except ConocoPhillips signed a takeover agreement with the authorities. The Venezuelan authorities threatened to expropriate the company’s properties if they did not agree to the agreement.
It will probably be very difficult for oil-rich Venezuela to pay the bill. Half of the country’s economy has been down 50 percent since 2013, according to news agency AP. In addition, the country is struggling with high inflation.
Venezuela faces 20 cases in the World Bank arbitration court, more than any other country in the world. Today, the country owes around $ 150 billion to creditors around the world.