THE HIGH COURT has recognised a US$1.1 billion arbitration award to a United States energy giant against the Venezuelan government for unlawfully expropriating its investments in Venezuela in 2007.
In an order on May 29, Justice Frank Seepersad allowed ConocoPhillips and its subsidiary Phillips Petroleum Company Venezuela Ltd to register the 2018 International Chamber of Commerce (ICC) final award against Venezuela’s state-owned oil company, Petróleos de Venezuela, SA (PDVSA), and two subsidiaries.
The award has been recognised in several other jurisdictions, including the UK, the US, Hong Kong, the Netherlands, Jamaica, Belize and Portugal.
Seepersad’s order allows CoconoPhillips to enforce the award and judgments for US$1.1 billion and post-award interest. He also gave orders for the service of the documents submitted by ConocoPhillips.
The application referred to other arbitration and enforcement actions in ConocoPhillips’ favour against the Venezuelan oil companies.
Supporting documents said ConocoPhillips intends to go after PDVSA for "relinquishing its rights in respect of the Dragon Gas Field and for the infrastructure it owns; and any consideration paid by the National Gas Company or Trinidad and Tobago to a PDVSA-related entity or Venezuela for ongoing supplies of gas."
On the Dragon Gas field project between Trinidad and Tobago and Venezuela, ConocoPhillips said it was aware of the project through media reports; the US Treasury Department’s Office of Foreign Assets Control sanctions and amendments to OFAC’s licences; providing its own timeline of the project, dating back to 2008 and which included the MOU signed with the TT Government in 2016 and the March 2017 US$100 million agreement to supply gas to NGC and Shell.
It also said ConocoPhillips wished to have the arbitral award recognised so it could enforce it as a judgment of the TT High Court against any compensation (or other monies) payable to PDVSA.
“Sources within Venezuela disclosed that Venezuela was ‘close’ to approving a licence for Shell and NGC to develop the Dragon Field and to export subsequent gas products to TT. “Negotiations were expected to take place in Venezuela at the end of November 2023.
“The terms proposed were said to provide a 25-year exploration and production license for the Dragon Field in favour of Shell and NGC, with Shell having a 70 per cent stake and operational control, and NGC holding the remaining 30 per cent.
“PDVSA would no longer have a stake in the project; instead, Venezuela would receive 'cash or a portion of gas production as royalties,'” supporting documents said.
The application further said ConocoPhillips “truly believes” there are assets belonging to PDVSA and the subsidiaries, “within the court’s jurisdiction which can be used to satisfy some or all of the award.
In the early 1990s, Venezuela created a new fiscal framework to induce foreign investment in its heavy oil projects in the Orinoco Belt and elsewhere.
ConocoPhillips helped Venezuela develop the Petrozuata, Hamaca and C
