Trinidad and Tobago Court Authorizes ConocoPhillips to Enforce $1.33 Billion Lawsuit Against Venezuela

A recent ruling by a Trinidad and Tobago court has authorized ConocoPhillips to enforce a $1.33 billion lawsuit against Venezuela over past expropriations. This decision, stemming from the seizure of ConocoPhillips' assets in Venezuela in the 1990s, may significantly impact joint gas projects between the two countries.

The court's decision grants ConocoPhillips the right to seize any compensation owed to Venezuela from joint gas ventures with Trinidad. High Court Judge Frank Seepersad stated, "The order gives to the claimant a green light to be able to enforce the judgment in Trinidad if they can establish there are assets held by the defendants or there is money which is owed to the defendant by entities in Trinidad and Tobago."

Why this matters: This ruling has significant implications for the latest oil and gas industry in the region, highlighting the legal and financial complexities involved in international energy projects. The potential disruptions to joint gas projects between Trinidad and Tobago and Venezuela could have far-reaching consequences for the energy sector and the economies of the countries involved.

ConocoPhillips has been pursuing enforcement of arbitration awards against Venezuela and its state oil company PDVSA in various jurisdictions, including the US and the Caribbean. PDVSA had paid around $700 million to ConocoPhillips through a settlement agreement but stopped payments in late 2019.

The ruling may pose challenges to the development of key offshore gas fields involving entities including the National Gas Company of Trinidad and Tobago (NGC), Shell, and BP. Trinidad and Tobago's state energy firm NGC has not been served with documents related to this matter and continues to progress work on a gas project with its partners and collaborators.

This week, BP and NGC received a two-year license from the US Treasury Department to negotiate and develop the Cocuina-Manakin gas fields with Venezuela. The US Treasury Department had previously issued a license for the Dragon gas project in Venezuelan waters in 2023.

ConocoPhillips is also involved in a Delaware case that will auction shares in Venezuela-owned refiner Citgo Petroleum's parent firm to pay creditors over $20 billion in compensations. Ryan Lance, ConocoPhillips' CEO, commented that the company is involved in the Citgo lawsuit "to get the money that they owe us for the judgments that we have against the Venezuelan government for the expropriation of our assets."

The court documents outlined ConocoPhillips' application for "recognition of the award; judgment in the terms of the award set forth in the draft order accompanying the application; and permission to enforce the award." PDVSA has been given a seven-day period to challenge the court's decision made in favor of ConocoPhillips.

This ruling has far-reaching implications for the oil and gas industry in the region. It highlights the legal and financial complexities involved in international energy projects and the potential disruptions that can arise from unresolved disputes.

Key Takeaways

• Trinidad court rules in favor of ConocoPhillips' $1.33 billion claim against Venezuela.
• Court grants ConocoPhillips right to seize assets or compensation owed to Venezuela.
• Ruling may disrupt joint gas projects between Trinidad and Tobago and Venezuela.
• ConocoPhillips pursuing enforcement of arbitration awards against Venezuela in multiple jurisdictions.
• Ruling highlights legal and financial complexities in international energy projects.