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Thursday, September 13, 2007

Exxon Mobil seeks arbitration over Venezuela assets

By Jim Kennett and Steven Bodzin
September 13 2007

Exxon Mobil Corp., the world's largest oil company, filed for arbitration in a dispute over assets seized by the Venezuelan government.

The Irving, Texas-based company's 41.7 percent stake in the heavy oil project had a net-book value of about $750 million at the time of the expropriation, according to a regulatory filing today. The company said it requested arbitration Sept. 6 with the International Centre for Settlement of Investment Disputes.

Venezuelan President Hugo Chavez, claiming a fight against imperialism, took control in May of four ventures that turn tar- like crude into about 600,000 barrels of synthetic oil a day. He forced foreign oil producers to give state-owned Petroleos de Venezuela SA at least 60 percent ownership in each venture.

"Exxon Mobil has worked with the Venezuelan government to reach an agreement regarding compensation based on the fair market value of the assets,'' Exxon Mobil spokesman Len D'Eramo said in an e-mailed statement. "We are disappointed these discussions have not been successful.''

Exxon Mobil remains willing "to engage in substantive discussions with the Venezuelan government,'' D'Eramo added in another e-mail.

Exxon Mobil had been in talks with Venezuelan authorities since walking away from its Cerro Negro operations on June 26, the day foreign oil companies were ordered to sign over stakes in their ventures that extract and process crude oil in the Faja del Orinoco. Houston-based ConocoPhillips also refused to sign.

Check the rest of the article on PetroleumWorld. ConocoPhillips has also intentions to go to International Arbitration.

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