An international arbitration tribunal has decided that Venezuela must pay Exxon Mobil $1.6 billion in compensation for expropriated assets.
Exxon had claimed up to $16.6 billion over the nationalization of its Cerro Negro Project and other losses in 2007.
Venezuela has not said whether it will appeal. But the foreign minister said the decision was “reasonable”.
The ruling was made by the World Bank’s International Centre for Settlement of Investment Disputes (ICSID).
It is a blow to Venezuela which is struggling with a shortage of foreign currency, inflation and a stagnating economy.
Venezuela must pay Exxon Mobil $1.6 billion in compensation for expropriated assets
Foreign minister Rafael Ramirez called it a victory for Venezuelan sovereignty over “exaggerated claims”, referring to the much higher amount indicated by the Exxon Mobil.
The Venezuelan government is currently battling more than 20 similar demands at the World Bank by other foreign companies over the state’s takeover of private assets under its former president, Hugo Chavez.
Exxon Mobil said in a statement: “The decision confirms that the Venezuelan government failed to provide fair compensation for expropriated assets.”
The company added that it “accepts Venezuela’s legal right to expropriate the assets of our affiliates subject to compensation at fair market value”.
A previous decision in 2012 ruled that PDVSA, the state oil company, should pay Exxon $908 million.
Venezuela has since paid a portion of that award, which will be taken into account in calculating the balance that Venezuela owes.
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Bolivia has decided to bring two Spanish-owned electricity supply companies under state control.
President Evo Morales accused the subsidiaries of the Spanish company, Iberdrola, of overcharging consumers in rural areas.
Evo Morales said rural households had been paying three times more for their electricity than people in urban areas.
The left-wing president has previously nationalized oil, telecommunications and energy-generating companies.
“We had to see that the quality of electricity service is uniform in rural as well as urban areas,” Evo Morales said.
He added that his decree was in line with the South American country’s constitution, which says that the public interest is above private interests when it comes to the supply of energy.
“We were forced to take this measure,” he said, describing the electricity charges as “unfair and unequal”.
President Evo Morales accused the subsidiaries of the Spanish company, Iberdrola, of overcharging Bolivian consumers in rural areas
An independent arbiter will decide in up to 180 days how much compensation Iberdrola will get for its assets, Evo Morales said.
In its first reaction to the Bolivian government decision, Iberdrola said it hoped to be paid a fair price for the companies.
“We hope we will get the real value of our share,” a spokesman told the AFP news agency.
Iberdrola owned 89.5% of Electropaz, which operates in Bolivia’s largest city, La Paz, and surrounding areas, and 92.8% in Elfeo, based in the Oruro region.
Armed police guarded the companies’ headquarters and plants in both cities as Evo Morales announced their nationalization.
Spain has warned it will defend its interests as a row with Argentina over the nationalization of oil company YPF Repsol.
Promising a “clear and overwhelming” response, the Spanish government summoned the Argentine ambassador to Madrid to express its concern.
The majority stake in YPF is owned by Spanish oil firm Repsol.
Repsol shares fell by 8% in early trading in Madrid and the firm has vowed to demand compensation.
It said it would seek international arbitration over its 57% stake in YPF if necessary.
“These acts will not remain unpunished,” Repsol executive chairman Antonio Brufau told reporters.
According to AFP news agency, Repsol will seek compensation of at least $10 billion (7.7 billion Euros).
Spain has warned it will defend its interests as a row with Argentina over the nationalization of oil company YPF Repsol
Argentina’s ambassador to Madrid, Carlo Antonio Bettini, is due to arrive at the foreign ministry at midday.
Earlier, Spanish Foreign Minister Jose Manuel Garcia-Margallo said the “climate of friendship” between the two countries had been broken.
Spanish Prime Minister Mariano Rajoy is due to visit Mexico and Colombia, where he is expected to seek support for Madrid’s position.
The nationalization was announced to applause on Monday at a meeting between Argentine President Cristina Fernandez Kirchner, her cabinet and provincial governors.
Reading out a statement at the meeting, an official said YPF had been “declared a public utility and subject to expropriation of 51% of its assets”.
Argentina wants to reduce its expensive energy imports from elsewhere.
Before rumors surfaced several weeks ago that Argentina might take YPF from Repsol, Spain and Argentina generally enjoyed good political ties, and important economic ones.
Spain does a significant amount of trade in the country, so there is likely to be an economic fallout to this dispute too.
Antonio Brufau accused President Cristina Fernandez Kirchner of resorting to nationalization “as a way of hiding the economic and social crisis which Argentina is suffering”.
Argentina’s crisis, he argued, was rooted in “a mistaken energy policy”.
He accused Argentina of running a campaign of “harassment” in recent weeks in order to push down the price of YPF shares and get a bargain price for the expropriation.
“It is not appropriate for a modern country, Argentina does not deserve this,” he said.
Repsol’s Argentine partner, the Eskenazi family’s Grupo Petersen, has a 25.5% stake in YPF which will not be affected by the nationalization.
However, Reuters notes that it is unclear how Petersen will be able to repay a $1.9 billion loan provided by Repsol.
