CARACAS (Reuters) - Venezuela said on Wednesday that U.S. oil company ConocoPhillips (COP.N) rejected its latest offer of compensation for the 2007 nationalization of oil projects and the South American country now seeks a new hearing on the matter with the World Bank.
Venezuela was responding to a World Bank arbitration panel, that last week said the South American country had failed to act in good faith or properly compensate the U.S. company for three big oil projects that were expropriated by the socialist government of the late Hugo Chavez.
Venezuela’s lawyers Curtis, Mallet-Prevost, Colt & Mosle LLP - in a letter published by Energy Ministry Rafael Ramirez on Twitter on Wednesday - denied the allegations and asked the tribunal for a hearing.
“ConocoPhillips was ready to reach a deal for $6.5 billion,” the letter said. But, Venezuela only offered $2.3 billion, it said.
Venezuela’s lawyers said $2.3 billion was higher than the estimate of the assets’ value which their experts had arrived at: about $1.8 billion, excluding tax and royalties claims.
“An offer in excess of a professional, good-faith valuation is by definition a good-faith offer,” the letter said.
A ConocoPhillips spokeswoman rejected that interpretation.
“Venezuela never formally offered to pay ConocoPhillips fair compensation for our expropriated assets. In fact, the Tribunal’s recent decision found that Venezuela failed to negotiate in good faith,” the spokeswoman told Reuters on Wednesday.
Last week’s partial ruling by the World Bank’s International Center for Settlement of Investment Disputes (ICSID) did not determine how much money Venezuela must pay the U.S.-based company. It also limited the scope of ConocoPhillips’ claims by excluding future tax credits.
The company claimed victory, but experts say a final ruling on damages in the biggest arbitration case that Venezuela is facing could take one or two more years.
ConocoPhillips initially asked Venezuela for $30 billion in compensation for its stakes in the Hamaca and Petrozuata heavy crude upgraders and a separate offshore project called Corocoro, but Venezuela offered some $2 billion.
In their letter published on Wednesday, Venezuela’s lawyers said ConocoPhillips’ original claim had been “absurd.”
Several major foreign oil companies, including Chevron Corp (CVX.N), were able to reach agreements with the Chavez government and give up majority stakes in projects while hanging onto minority ones.
ExxonMobil Corp (XOM.N) and ConocoPhillips did not reach accords and eventually took their claims to arbitration.
Venezuela has more than 20 arbitration cases pending at ICSID and other courts stemming from Chavez’s nationalizations. The country pulled out of the ICSID in 2012, but will still be subject to cases submitted beforehand.
Lawyers consulted by Reuters said a hearing before ICSID would unlikely change last week’s ruling, but that Venezuela could ask for an explanation of the decision, and could also request that it be annulled.
In their letter, Venezuela’s lawyers cited classified U.S. diplomatic cables published by WikiLeaks that the lawyers said proved both sides had engaged in long “good faith” negotiations before moving to arbitration.
Additional reporting by Marianna Parraga in Houston; Editing by Bob Burgdorfer