Curaçao court OKs Conoco seizing Venezuelan oil assets

A court on the Dutch island of Curaçao has authorised the local subsidiary of US oil giant ConocoPhillips to seize US$636 million worth of assets held on the island by Venezuela’s state oil company, PDVSA.

 

The move comes as Houston-based Conoco seeks to recover US$2 billion in a decade-old dispute over the expropriation of its Venezuelan oil projects by the OPEC nation’s socialist government, which is struggling with an economic crunch which has caused widespread shortages of food and medicine.

 

Curacao Economy Minister Steve Martina said at a news conference on the 13th May that Conoco already had taken control of some oil products at the Isla Curazao refinery, though he did not specify how much.

 

The Curaçao court’s ruling of the 4th May is a blow to Venezuela, which uses refineries on Curaçao and elsewhere in the Netherlands Antilles to store a significant portion of the oil it exports to its three main foreign markets — China, the US and India.

 

According to the ruling reviewed by The Associated Press, the company can seize all oil products stored at the Isla Curazao and the Di Korsou refineries on Curaçao. The court also said Conoco can take over any crude oil shipments en route from Venezuela to the island which are within 19 kilometres (12 miles) of the Curacao coast.

 

Venezuela holds the world’s largest underground oil reserves but production has declined under nearly two decades of socialist leadership, casting the once-wealthy nation deep into political and economic crisis.

 

In late April an arbitration panel under the International Chamber of Commerce found that Venezuela under the leadership of then-President Hugo Chavez in 2007 illegally expropriated joint venture operations with ConocoPhillips.

 

The firm turned to a local court to collect the award, but the petition spelling out its demands has not been made public.

 

The US$2 billion award represents the equivalent of more than 20 percent of the cash-strapped Venezuela’s foreign currency reserves.

 

Source: PennEnergy