Caracas – The top lawyer for the Venezuelan government, Carlos Escarra, said ExxonMobil has lowered its compensation demands for nationalized oil assets from $20 billion to $6 billion.
In remarks to reporters Wednesday, he said socialist President Hugo Chavez's government is "clear" on the fact it must pay for the assets it expropriated in 2007, but it will not agree to the amounts the U.S. oil giant had been demanding.
State owned Petroleos de Venezuela S.A. said hours later in a statement that it is not in "direct negotiations" with Exxon and is not prepared to pay the amount being demanded by the multinational for the expropriation of the Cerro Negro project in the massive Orinoco heavy crude belt, without providing a figure.
"PDVSA reiterates that it is not in any discussions with ExxonMobil outside the procedures that have taken place in international arbitration," the company said.
It said the amount being demanded by the U.S. multinational "is outrageous, abusive and intended to charge the people for what is the sovereign exercise of its oil policy."
Energy Minister Rafael Ramirez, who also is PDVSA's president, said in July that Venezuela would pay ExxonMobil and ConocoPhillips compensation for the nationalization of their assets in 2007.
Ramirez said then that payment would be made as long as a "reasonable" amount is either reached via negotiations between the parties or established by the World Bank's International Center for Settlement of Investment Disputes, or ICSID.
Escarra said his office is dealing with a "block" of 10 arbitration claims filed by multinational oil companies against PDVSA and state petrochemical firm Pequiven.
In total, Escarra said the solicitor-general's office is handling 28 arbitration cases before the ICSID and 20 before the International Chamber of Commerce, as well as another 20 private lawsuits filed against Venezuelan state-owned companies.
"Now Argentina and other countries are pushing for a Latin American arbitration court, precisely in order to escape that Anglo-Saxon world view," Escarra said.
In addition to multinational oil firms, Escarra said mining companies such as U.S.-based Gold Reserve and Canada's Crystallex also have sued Venezuela to secure compensation for nationalized assets.
In 2007, Chavez's government forced foreign oil companies to convert their existing operating agreements into contracts that made them minority partners in joint ventures with PDVSA in the Orinoco Belt.
While Exxon and Conoco refused to accept the new terms and left Venezuela, other oil majors including France's Total, Norway's Statoil, Britain's BP and San Ramon, California-based Chevron remained on as minority partners and received compensation.
The Orinoco Belt, according to the U.S. Geological Survey, is the world's largest petroleum reserve with more than 500 billion barrels of recoverable extra-heavy crude, which is more expensive to refine than lighter varieties of oil.