Fri | May 25, 2018

Court okays Conoco seizing Venezuelan oil assets

Published:Tuesday | May 15, 2018 | 12:00 AM
A warning sign stands at the entrance of the PDVSA/BOPEC Brasil Terminal in Rincon Bonaire on the Caribbean Netherlands island of Bonaire, Monday, May 7, 2018, where Venezuela refines and stores its heavy crude. (AP)

A court on the Dutch island of Curacoa has authorised the local subsidiary of United States oil giant ConocoPhillips to seize US$636 million worth of assets held on the island by Venezuela's state oil company, PDVSA.

The move comes as Houston-based Conoco seeks to recover US$2 billion in a decade-old dispute over the expropriation of its Venezuelan oil projects by the OPEC nation's socialist government, which is struggling with an economic crunch that has caused widespread shortages of food and medicine.

Curacoa Economy Minister Steve Martina said at a news conference on Sunday that Conoco already had taken control of some oil products at the Isla Curazao refinery, though he did not specify how much.

The Curacoa court's ruling of May 4 is a blow to Venezuela, which uses refineries on Curacoa and elsewhere in the Netherlands Antilles to store a significant portion of the oil it exports to its three main foreign markets: China, the United States, and India.

According to the ruling reviewed Sunday by The Associated Press, the company can seize all oil products stored at the Isla Curazao and the Di Korsou refineries on Curacoa. The court also said that Conoco can take over any crude oil shipments en route from Venezuela to the island that are within 19 kilometres (12 miles) of the Curacoa coast.

Venezuela holds the world's largest underground oil reserves, but production has declined under nearly two decades of socialist leadership, casting the once-wealthy nation deep into political and economic crisis.

An arbitration panel under the International Chamber of Commerce in late April found that Venezuela, under the leadership of then-President Hugo Chavez in 2007, illegally expropriated joint venture operations with ConocoPhillips.

The firm turned to a local court to collect the award, but the petition spelling out its demands has not been made public. The US$2 billion award represents the equivalent of more than 20 per cent of the cash-strapped Venezuela's foreign currency reserves.

AP