The Upheld Decision: Venezuela Ordered to Pay ConocoPhillips $8.7 Billion for Expropriation

The International Centre for the Settlement of Investment Disputes (ICSID) at the World Bank has upheld its previous ruling, denying Venezuela’s appeal and mandating the country to pay $8.7 billion to ConocoPhillips, a U.S.-based oil giant, for the expropriation of three oil assets almost two decades ago.

In 2007, Venezuela seized two extra-heavy oil projects in the Orinoco Oil Belt region, including the Petrozuata and Hamaca upgrading projects, along with the Corocoro offshore project for crude oil extraction. This move was part of former President Hugo Chavez’s nationalization efforts.

ConocoPhillips filed a dispute with ICSID, citing the bilateral investment protection agreement between Venezuela and the Netherlands, and the ICSID Convention. In March 2019, the Tribunal ruled in favor of ConocoPhillips, ordering Venezuela to pay $8.7 billion in damages and $20.4 million in arbitration costs.

After Venezuela’s failed attempt to annul the award, the enforcement was provisionally stayed. Following subsequent hearings and submissions, the annulment committee closed the case on December 2, 2024.

The Upheld Arbitration Award

The committee dismissed Venezuela’s annulment applications, ordering the country to cover legal fees and expenses amounting to $9 billion. ConocoPhillips was awarded $6.46 million for legal representation costs, marking a significant win for the oil company.

Venezuela’s Ongoing Battle with Sanctions

U.S. sanctions on Venezuela have been in place since 2005, with recent expansions under the Trump administration due to alleged repression and corruption by President Nicolás Maduro. The Biden Administration offered limited relief in 2022 but reinstated sanctions in 2024 following electoral roadmap violations.

In response, the U.S. Treasury imposed financial sanctions on Maduro officials for electoral fraud and repression, further intensifying the diplomatic standoff.

ConocoPhillips’ Victory in PDVSA Arbitration

In a separate ICC arbitration, ConocoPhillips was awarded $2 billion from PDVSA and its subsidiaries in 2018 for contractual breaches stemming from Venezuela’s expropriation of investments. A settlement agreement was reached in 2018, securing the full amount owed to ConocoPhillips.