Venezuela to pay nationalized US firms USD 420 mn

[Judi Lynn]

Last edited Mon Mar 26, 2012, 05:42 AM - Edit history (1)

Source: Indo-Asian News Service

Venezuela to pay nationalized US firms USD 420 mn

Caracas, March 26 : State energy giant Petroleos de Venezuela SA (PDVSA) will pay US natural gas companies Williams Cos Inc. and Exterran Holdings Inc. a total of USD 420 million for assets nationalized in 2009, Energy Minister Rafael Ramirez said.

With this payment "they will drop the arbitration" they were setting up with the International Center for the Settlement of Investment Disputes and will relinquish the USD 1.2 billion in compensation they initially requested, Ramirez, who is also PDVSA's president, said in a statement to reporters.

"In concluding this operation, both PDVSA and Venezuela have shown themselves open to reaching friendly accords with foreign investors disposed to accept fair compensation in cases of nationalization," PDVSA said in a communique.

The statement from PDVSA added that the compensation for the transfer of assets, including natural gas injection facilities, "will be paid, as in recent accords, 40 percent in cash and the remainder in equal installments over a 4-year period".

Read more: http://www.newkerala.com/news/2011/worldnews-178194.html

[fasttense]

1. $420 million is a drop in the bucket

The international unelected corporate controlled courts were all ruling against Venezuela but the rulings were in small amounts $200 to $500 million when the value of the oil corporation was/is in billions. So. they might as well settle because they were not going to get much more.

Here's to more countries nationalizing their natural resources instead of handing it over to corporate thieves.

[Rain Mcloud]

2. No profit in gasoline.......

Now that gas is $3.90 per gallon per national average it's time to remind folks what a ripoff they get at the pump.
Gasoline is .48 per gallon in Saudi Arabia and before we start that bullshit discussion that gasoline in Saud
is nationalized,remember the US taxpayer gives 5 billion to the US refineries every year.
Source:http://hereandthere40.wordpress.com/2012/02/24/list-of-countries-with-the-cheapest-gas-prices/

[COLGATE4]

3. So much for paying fair market value for

nationalized assets.

[Warren Stupidity]

4. you should read up on the history of oil and gas resources in Venezuela.

They were national assets by law (in the constitution) until a neolib friendly government illegally sold them off at the direction of IMF/WB. The Chavez regime simply undid a vast wrong done to the people of Venezuela, and yes the compensation is fair.

[ChangoLoa]

6. Yes and No

Oil as a ressource has always been a national asset in Venezuela. Since the Independence, all minerals and underground ressources are the property of the Venezuelan state. You're talking about oil exploitation : its finding, the extraction, the reffining, the transport and the marketing.

That industry functionned under a concession regime from 1908 to 1975. In 1976, the whole activity, from A to Z, was nationalized. What happened in the beginning of the 90's was the reopenning of the possibility for private/foreign capital to invest in the oil sector and even to be in majority in some projects. Nonetheless, all these new mixed-capital (public/private) companies equated only to 10-15% of the national oil production when Chavez was elected. The rest was produced according to the 100% public capital scheme of the 1976 nationalization.

The Chavez reform didn't end the private/foreign capital participation in the oil sector. It decided that public capital had to be in majority (>60%) in every mixed company. But nowadays, those companies account for 30% of the national production. So all in all, private/foreign capital is getting a similar part of the Venezuelan oil profits today than during the 90's, and infinitely more than during the 80's, when they got zero.

[COLGATE4]

7. They were not illegally sold. I participated in the privatization

of the first of the Venezuelan electric companies. The process was open and fair. And yes, the government then "bought" our assets for 25 cents on the dollar, once everything was up and running for the first time in 80 years. No 'great wrong' to the Venezuelan people (unless you believe that providing cheap, reliable electric service is a 'vast wrong').

[ChangoLoa]

5. This was +/- its real market value

As it was the case with Exxon's capital too. Even if they asked for 10G$ and declined the first offer from the Ven govt, which was better than what the international arbitration gave them. Of course, oil companies are well-known for inflating 10 times the value of their expropriated capital.

The company will drop the arbitration in a foreign court which is not favorable to Venezuela. That's a significative sign concerning the real value of what they were asked to sell.