On Thursday a World Bank arbitration panel overturned a US$1.4 billion ruling against Venezuela for nationalizing one of Exxon Mobile’s major projects in the country after the election of late President Hugo Chavez in 1999.
The World Bank’s International Centre for Settlement of Investment Disputes overturned a 2014 ruling which ordered Venezuela to compensate Exxon Mobile for Chavez’s decision to nationalize the multi-billion dollar Cerro Negro project in 2007.
“We were confident all along that our position was correct and are very pleased that the annulment committee agreed,” Venezuela’s lawyer George Kahale said.
Thursday’s ruling is the second major victory for Venezuela in their 10-year legal battle against Exxon.
The original 2014 ruling was itself something of a victory given that Exxon had originally asked for US$10 billion in compensation for the expropriation of two major drilling projects.
The ICSID annulment panel ruled unanimously that the original 2014 tribunal decision had “exceeded its powers by failing to apply the proper law” in awarding even a much smaller judgment to Exxon.
A spokesperson for Exxon said Thursday the U.S. based oil giant will review its legal options, which could include requesting a resubmission of the case to a differently constituted World Bank panel.
The panel’s ruling still requires Venezuela to pay US$179.3 million in compensation for Exxon’s La Ceiba project.
“I would imagine that ExxonMobil cannot be happy with this outcome after 10 years of litigation and will resubmit the award for a second opinion,” said Russ Dallen, an international lawyer who follows Venezuela, in an interview with the Latin American Herald Tribune.
The former head of Exxon Mobile, Rex Tillerson, had launched the case against Venezuela before becoming Donald Trump’s Foreign Secretary.
During his confirmation hearings, Tillerson signaled that he would work towards regime change in Venezuela by cooperating with “our friends in the hemisphere, particularly Brazil and Colombia” as well as the Organization of American States.
Venezuela is currently contesting 24 cases at the ICSID related to a series of nationalizations after the victory of Chavez’s wildly popular Bolivarian Revolution.
The Chavez government took back control of various commodity sectors — including electricity, telecom, mining, and agriculture — which for years had been controlled by foreign multinationals, and used the profits from these expropriations to fund its ambitious social programs which saw millions lifted out of poverty.
Environment Wins: Shell Sells over $7B in Canada’s Tar Sands
In a major blow to fossil fuel industry lobbyists, Royal Dutch Shell has sold almost all of its Canadian oil sands activities in a US$7.25-billion deal, the Anglo-Dutch energy giant said Thursday, which would result in cutting its debt and reducing involvement in one of the most environmentally damaging forms of fossil-fuel extraction.
Shell said in a statement that it had signed agreements to sell its interests in two oil sands projects, Athabasca and Peace River, to Canadian Natural Resources Limited.
Shell will, however, receive a net US$7.25 billion in the vast transaction, which is subject to regulatory approvals and pegged for completion in mid-2017.
“This announcement is a significant step in reshaping Shell’s portfolio in line with our long-term strategy,” said Chief Executive Ben van Beurden in Thursday’s statement.
“We are strengthening Shell’s world-class investment case by focusing on free cash flow and higher returns on capital, and prioritizing businesses where we have global scale and a competitive advantage such as integrated gas and deep water.”
The oil sands are some of the most expensive forms of fossil fuel explorations as it cost more to process the crude oil after extraction. This process is also considered one of the worst for the environment as it emits more carbon dioxide than production of conventional crude oil.
Last decade, the Canadian tar sands became attractive for major oil companies as the price of a barrel of oil reached record high at more than US$100.
However, with the price plummeting to its record lows since 2014, as well as increased pressure from environments, companies have found themselves in massive debts and have been selling out their shares.
Oil firms Exxon Mobil, Conocophillips and Statoil have written down or sold their Canadian oil sand assets over the past few months. Therefore the future for the environmentally-disastrous Canadian tar sands look grim as the price of oil is unlikely to change and renewable energy is getting rapidly cheaper.
Environmentalists welcomed news of international majors pulling out of the oil sands and said they were likely wary of being locked into long-term investments in the region.
“There isn’t much room for bitumen in a low-carbon, low oil price future and the smart money recognizes that’s where we are headed,” said Greenpeace Canada energy strategist Keith Stewart.
Trump Ban Could Hit World Cup Bid: FIFA Chief
U.S. President Donald Trump’s controversial travel ban could make it impossible for his country to host the 2026 World Cup, FIFA president Gianni Infantino warned on Thursday.
The United States is the favorite to stage the expanded 48-team tournament in 2026, either on its own or as part of a joint-bid with neighbors Mexico and Canada.
But with Trump seeking to ban nationals from several Muslim-majority countries, Infantino says the U.S. may not even be in a position to submit a bid.
“Mr. Trump is the president of the United States of America and as such of course (I have) huge respect for what he does,” Infantino told reporters at London’s Heathrow airport.
“We are now in the process of defining the bid requirements. In the world there are many countries who have bans, travel bans, visa requirements and so on and so forth.
“It’s obvious when it comes to FIFA competitions, any team, including the supporters and officials of that team, who qualify for a World Cup need to have access to the country, otherwise there is no World Cup.”
Infantino’s comments echoed recent remarks by UEFA president Aleksander Ceferin, who said the World Cup “cannot be played” in a country with extensive travel restrictions.