In 2007, Venezuela nationalized its oil assets, violating contracts with oil giants such as Exxon. A Paris-based International Chamber of Commerce arbitration panel awarded $908 million to Exxon, and the outcome is being viewed as more of a victory for the country’s state oil company than the company.
Reuters reports Exxon wanted $10 billion for an upgrading project that Venezuela took over. The country offered $1 billion, but the arbitration panel undercut even that amount. Exxon is hoping to squeeze a better result out of a hearing at the World Bank’s International Centre for Settlement of Investment Disputes, which could take the case on next month.
It remains to be seen whether or not rulings such as this stop international companies from making investments in volatile areas, as well as whether or not oil giants left stung by poor investments pass their costs onto the consumer.