CARACAS, Venezuela (AP) â¿¿ Venezuelan President Hugo Chavez said Sunday that his government should pull out of a World Bank-affiliated arbitration body and won't recognize its decisions.
Exxon Mobil Corp. is one of more than a dozen companies with arbitration cases against Venezuela pending before the Washington-based International Centre for Settlement of Investment Disputes, or ICSID.
Chavez announced his decision while referring to a more than $900 million award that Exxon Mobil recently won in another arbitration case before the International Chamber of Commerce."Now they're threatening us in the ICSID," Chavez said on his Sunday television program. "We have to get out of that ICSID. And I'll go ahead and say it: We won't recognize any of ICSID's decisions." Analysts said that if Chavez follows through on the plan, it could hurt Venezuela's ability to obtain credit internationally and attract oil investments. It also might prompt companies in disputes with Chavez's government to try to freeze the country's assets, including refineries it owns in the U.S. However, pulling out of the arbitration body would take time, and analysts said Chavez's government still has legal obligations that it can't escape in the pending cases before the arbitration body. Exxon Mobil sought arbitration after Chavez's government nationalized an oil project in Venezuela in 2007. The Irving, Texas-based oil company declined to comment about Chavez's remarks. The ICSID's website lists 17 pending cases against Venezuela. They include claims by Houston-based oil company ConocoPhillips Co., U.S. glass container manufacturer Owens-Illinois Inc. and Toronto-based mining company Crystallex International Corp. The Caracas-based consulting firm Ecoanalitica estimated recently that the bulk of the government's nationalizations have involved more than $33.7 billion in assets, including about $23 billion in outstanding obligations. It estimates that of that, Exxon Mobil and ConocoPhillips stand to gain a total of $11.5 billion in their pending arbitration claims.
Check Out Our Best Services for Investors
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Model portfolio
- Stocks trading below $10
- Intraday trade alerts