Conoco Court Victory Sends Venezuela’s Gas Money Up in Smoke

ConocoPhillips has taken a significant step forward in its long-running battle to recover payments from Venezuela’s state oil company PDVSA. On September 27, 2024, a Trinidadian court approved ConocoPhillips’ request to seize payments PDVSA allegedly received for its role in the Dragon Gas offshore project. This ruling follows years of legal wrangling over compensation for assets nationalized by the Venezuelan government.

The court appointed an accounting firm as receiver to facilitate the process. Judge Frank Seepersad cited concerns that PDVSA could try to move assets out of Trinidad to avoid payment obligations, as seen in the previous relocation of its European headquarters to Moscow.

This latest legal victory for ConocoPhillips builds on earlier efforts to enforce a $1.33 billion arbitration claim against Venezuela. Despite past partial payments, PDVSA stopped making required payments in 2019, prompting ConocoPhillips to pursue legal action in several jurisdictions.

The case is part of a broader trend in the oil and gas industry, where companies such as ConocoPhillips are increasingly seeking to enforce arbitration awards against Venezuela following the nationalization of foreign assets. These moves are aimed at recovering revenue lost through asset seizures or the diversion of payments related to energy projects.

This development is not just a legal victory. These court rulings could complicate financial arrangements for partnerships seeking to access offshore gas fields in Trinidad and Venezuela. While this battle is far from over, ConocoPhillips has gained significant leverage in seeking compensation.

In 2018, ConocoPhillips imposed crude oil and fuel cargoes at a storage terminal in Aruba that was operated by PDVSA’s US subsidiary Citgo in Conoco’s attempt to claim a $2 billion judgment for the forced nationalization by PDVSA has two oil projects by Hugo Chavez of Venezuela.

By Julianne Geiger for Oilprice.com

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