Exxon and the Venezuelan government are scheduled to resume arguments before the World Bank panel in February.

Exxon sought arbitration with PDVSA and the Venezuelan government in 2007, a decade after Mobil Corp. began drilling wells in the Orinoco River basin and building facilities to process the region's thick, tar-like crude. Exxon acquired Mobil and assumed operations of the Cerro Negro venture in 1999.

PDVSA said yesterday on its website that it will pay $255 million in cash for the judgment, after accounting for about $300 million in a frozen New York bank account and $191 million in Exxon debt that the Venezuelan company will cancel. The total amount of the International Chamber of Commerce ruling was for $907.6 million, minus a $161 million counterclaim by PDVSA.

ConocoPhillips, which joined Exxon in rejecting Venezuela's new terms in 2007, also is awaiting a ruling in its case before the World Bank panel.

During the final year of operations under Exxon's control in 2006, the Venezuelan assets had net income of $362 million on sales of $758 million, a profit margin that was quadruple the company's worldwide average. Exxon originally sought $12 billion in compensation for the nationalization and later lowered its demand to $7 billion.

Exxon's $406 billion market value exceeds Venezuela's total economic output and is larger than the gross domestic products of all but 23 of the world's nations.

'Fair-Market Value'

Chavez's seizure of assets cost Exxon 425 million barrels of proved reserves at the end of 2007, which had a market value of $38 billion at the time of the nationalization, based on Bloomberg calculations.

The ruling by the New York-based International Chamber of Commerce probably has few implications for foreign investment in Venezuela's energy sector, Brinker said. Although U.S. and European producers such as Chevron Corp., Total SA and Statoil ASA yielded to the 2007 seizures that made them junior partners to PDVSA, Chavez has been increasingly courting investments from Russian and Chinese energy firms, Brinker said.

The separate proceeding before the World Bank's International Centre for the Settlement of Investment Disputes is “larger” than the ICC case, Patrick McGinn, an Exxon spokesman, said yesterday in an e-mailed statement.

“We recognize Venezuela's legal right to expropriate assets subject to compensation at fair-market value,” McGinn said. “This ICC arbitration award represents recovery on a limited, contractual liability of PDVSA that was provided for in the Cerro Negro project agreement. Contract sanctity and respect for the rule of law are core principles used to manage our business over the long term.”

The three-person World Bank panel was created in August 2008 and began deliberations in November 2008, according to case documents published on the ICSID's website. The panel was occupied with jurisdictional arguments until June 2010 and disputes about document production through March 2011, the filings showed. Hearings are scheduled to resume next month, McGinn said.

The panel members are French jurist Gilbert Guillaume, University of Geneva professor Gabrielle Kaufmann-Kohler, and Egyptian lawyer Ahmed Sadek El-Kosheri, according to the ICSID's website.

Guillaume, 81, adjudicated a century-old territorial dispute between Indonesia and Malaysia when he was president of the International Court of Justice from 2000 to 2003. He also presided over Belgium's unsuccessful attempt to prosecute an African politician for war crimes.

Kaufmann-Kohler, a former director of Zurich-based UBS AG, was Exxon's nominee to the panel. El-Kosheri, 79, was Venezuela's nominee. He's a former legal adviser to the Kuwaiti oil ministry and a partner in the Cairo law firm Kosheri, Rashed & Riad. Guillaume was assigned to the case by the ICSID.

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