Venezuela Unlawfully Expropriated ConocoPhillips’ Oil Investments
HOUSTON -- September 3, 2013
ConocoPhillips (NYSE: COP) today announced that an international arbitration
Tribunal ruled Venezuela unlawfully expropriated ConocoPhillips’ significant
oil investments in the Petrozuata and Hamaca heavy crude oil projects and the
offshore Corocoro development project. According to an International Centre
for Settlement of Investment Disputes (ICSID) Tribunal, Venezuela’s actions
amounted to an unlawful expropriation. In doing so, the Tribunal also
confirmed its jurisdiction over this dispute.
“We welcome this decision by the Tribunal,” said Janet Langford Kelly, senior
vice president, Legal, General Counsel and Corporate Secretary. “This ruling
sends a clear message that countries cannot expropriate their investments
without fair compensation.”
While today’s ruling is a major milestone, the arbitration process will
continue for a period of time in order to determine compensation owed for
ConocoPhillips’ substantial investments.
In the early 1990s, in order to induce foreign investments in its heavy oil
projects in the Orinoco Belt, Venezuela created a new fiscal framework that
applied specifically to these projects. Relying on these terms, ConocoPhillips
helped Venezuela develop the Petrozuata, Hamaca and Corocoro projects with its
industry-leading technology and substantial long-term investments.
However, in the summer of 2007, the government expropriated ConocoPhillips’
investments in their entirety without fair compensation. Consequently, in late
2007, the company initiated arbitration proceedings against Venezuela before
ICSID, an arm of the World Bank.
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ConocoPhillips is the world’s largest independent E&P company based on
production and proved reserves. Headquartered in Houston, Texas,
ConocoPhillips had operations and activities in 30 countries, $55 billion in
annualized revenue, $117 billion of total assets, and approximately 17,500
employees as of June 30, 2013. Production from continuing operations averaged
1,531 MBOED for the six months ended June 30, 2013, and proved reserves were
8.6 billion BOE as of Dec. 31, 2012. For more information, go to
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Davy Kongm, 281-293-2701 (Media)
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