Trinidad and Tobago's High Court has reaffirmed its decision to recognize U.S. oil giant ConocoPhillips' arbitration claim against Venezuela. This ruling, which could potentially freeze Trinidad's payments to Venezuela for joint natural gas projects, marks a significant development in the ongoing dispute over expropriations of oil Conoco's oil assets by the Venezuelan government.
In May, the court's original decision allowed ConocoPhillips to enforce a $1.33 billion claim against Venezuela by targeting compensation from joint energy ventures. Despite Venezuela and its state-owned oil company PDVSA failing to respond by the court's deadline, the ruling stands, opening the door for ConocoPhillips to pursue assets or payments in Trinidad.
Judge Frank Seepersad emphasized the potential impact of this ruling, stating, "The order gives the claimant a green light to enforce the judgment in Trinidad if they can establish there are assets held by the defendants or money owed to the defendant by entities in Trinidad and Tobago."
PDVSA had previously paid ConocoPhillips about $700 million as part of a settlement agreement, but it stopped making its requisite payments in late 2019. Since then, ConocoPhillips has spend considerable time attempting to enforce arbitration rulings against Venezuela in various Caribbean nations. This pursuit is part of a broader effort to recoup losses from Venezuela's nationalization of foreign-owned assets years ago.
In the United States, ConocoPhillips is among the top creditors pursuing proceeds from an auction of shares in PDVSA's subsidiary, PDV Holding, which owns Houston-based refiner Citgo.
The reaffirmed court decision in Trinidad comes amid ongoing negotiations involving Trinidad, Venezuela, and major energy companies such as NGC, Shell, and BP. These negotiations aim to develop offshore gas fields shared by Trinidad and Venezuela. As part of these projects, Trinidadian entities are expected to pay PDVSA and Venezuela bonds for access to gas reserves, further complicating the financial dynamics.
By Julianne Geiger for Oilprice.com
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Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group. More
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