Courtesy of Benzinga.
President Hugo Chavez said today that Venezuela will not recognize a ruling by the World Bank tribunal in a case involving Latin America’s largest oil-producing country and Exxon Mobil (NYSE: XOM), the largest U.S. oil company.
Exxon Mobil was recently awarded $746.9 million by the International Chamber of Commerce as compensation for the assets it lost in Venezuela when Hugo Chavez nationalized his country’s oil industry several years ago, but Exxon was seeking compensation of up to $12 billion.
Exxon took Venezuela to the World Bank’s International Center for Settlement of Investment Dispute seeking as much as $12 billion, Reuters reported. Venezuelan Oil Minister Rafael Ramirez told Reuters he doesn’t expect a ruling in the case before the end of 2012. Proceedings are scheduled to start next month.
For his part, Chavez has accused Exxon of trying to steal oil revenue from his country, but nationalization of oil assets and contentious litigation against Western oil majors puts Venezuela at risk of losing much-needed foreign investment in its oil industry.
Venezuela, an OPEC member, has some of the largest oil reserves in the world, but a poor political environment and lack of investment in energy-related infrastructure has hampered production there in recent years.
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