In 2007, the international legal dispute between Petróleos de Venezuela, S.A. (PDVSA) and the U.S. oil transnationals, ConocoPhillips and ExxonMobil, began. (PDVSA) and the US oil transnationals, ConocoPhillips and ExxonMobil, when the latter refused to join the Joint Venture schemes, as did the more than 20 other companies, in the context of the sovereign process of nationalization of Venezuela’s strategic resources that was underway during the government of President Hugo Chávez.
This new operational and commercial alternative not only left behind the business of the Operating Agreements of the oil opening, which generated unfavorable revenues for the State, but also the operating companies of such agreements left behind their illegal situation and adjusted to the conditions of the legal framework in force.
Returning to the U.S. companies, in the case of ConocoPhillips, in 2014 it initiated an arbitration before the International Chamber of Commerce (ICC), suing PDVSA for the payment of approximately US$20 billion.
Consequently, in 2018, the conciliation panel rejected that argument and determined that PDVSA only had to pay the amount of US$1.87 billion as compensation for the nationalization of the Hamaca and Petrozuata projects, in accordance with old association agreements.
Once that award was issued, in August of that year, PDVSA and ConocoPhillips reached a settlement agreement to recover the total amount owed and the U.S. company was required to suspend or terminate all measures taken to enforce the arbitration award.
It is no secret that compliance with these payments has been hindered by the unilateral coercive measures imposed by the United States against the Venezuelan State. So, taking advantage of this scenario, ConocoPhillips has set itself the objective of seizing PDVSA’s assets abroad as a form of payment of the indemnities claimed.
This time, the focus is on Jamaica, a country close to the Windward Passage, which in a previous issue on El Caribe was mentioned as one of the geopolitical elements considered fundamental by the United States in order not to lose control in that Caribbean area.
— MV English (@MV_Eng) August 9, 2021
The only refinery in Jamaica is PetroJam, owned by the Jamaican government. In 2006, the Jamaican government sold 49% of its shares to PDV Caribe of Venezuela and the remaining 51% of the company owned by the Jamaican government through the government’s state agency, Petroleum Corporation of Jamaica (PCJ).
Following the onslaught of US “sanctions” against PDVSA that significantly affected the commercial, assistance and development dynamics agreed in the Petrocaribe Agreement, in 2019 the Jamaican government acquired 49% of the shares in the PetroJam refinery that it shared with PDVSA.
Recently, the Jamaican newspaper The Gleaner published that ConocoPhillips won the judicial bid for the administration of Venezuela’s assets in Jamaica. Broadly speaking, the article deals with ConocoPhillips’ intentions and maneuvers to collect 115 million dollars owed by the Jamaican government to the Venezuelan State, using the arbitration award card.
This is not the first time that ConocoPhillips carried out this type of action. In 2018 different media reported on the seizure of products belonging to the Venezuelan state-owned oil company PDVSA from the “Isla” refinery operating in Curaçao. On that occasion the enforcement action by ConocoPhillips affected PDVSA’s crude and refined products stored on the islands of St. Eustatius, Aruba and Bonaire.
The Gleaner article outlines a series of key facts about the case in Jamaica:
- The lawsuit was filed in Jamaican court in 2020 by the law firm Kingston Nigel Jones and Company on behalf of Phillips Petroleum Company Venezuela Limited and its Venezuelan subsidiary, Conoco Phillips Petrozuata, against PDVSA and Corpoguanipa SA.
- The U.S. oil company is seeking compensation for the events of 2007.
- It is explained that initially PDVSA made the payments for the award, but ConocoPhillips claimed that they did not comply with their obligations.
- Kenneth Tomlinson of the liquidation company Business Recovery Services Limited was appointed as receiver by the Supreme Court to recover and distribute the Venezuelan assets in Jamaica to ConocoPhillips.
- According to court documents, this receivership covers “assets, including, but not limited to, any right to receive debt payments and interest now or hereafter due from the State of Jamaica, any department of the government of Jamaica or the Petrocaribe Development Fund.”
- The order issued by the court includes money owed by Jamaica to Venezuela for oil supplied under the Petrocaribe oil agreement signed in 2005.
- The Jamaican government claims it is willing to pay Venezuela, but has been unable to do so due to U.S. “sanctions” on PDVSA.
#Tablazo Conoco Philips maintains operation in #Jamaica to seize #Petrocaribe assets. The Supreme Court of the Caribbean nation appointed a receiver “to recover and distribute assets owed” to #PDVSA. Which ones have not yet been identified. pic.twitter.com/4rp1ePDQWa
– La Tabla (@latablablog) August 23, 2021
#Tablazo Conoco Philips mantiene operación en #Jamaica para apoderarse de activos de #Petrocaribe. La Corte Suprema de la nación caribeña designó a un administrador judicial “para recuperar y distribuir los activos adeudados” a #PDVSA. Aún no se ha identificado cuáles son. pic.twitter.com/4rp1ePDQWa
— La Tabla (@latablablog) August 23, 2021
It should be noted that ConocoPhillips is also behind Citgo shares and PDVSA funds that are sequestered in Portugal’s Novo Banco. So the US company has forced the barrier in using the arbitration award to obtain a kind of seizure right to PDVSA’s assets in Caribbean islands.
Based on this and on how the hunt for Venezuelan assets is developing, it could be analyzed that these transnationals are preparing the ground in the Caribbean for the substantial contributions that Guyana would offer as a new oil producer and, thus, the United States could recover its influence in the Caribbean strip.
The Caribbean is a commercial zone, close to the United States, of utmost importance for this transnational, taking into account that it would appropriate a refinery park ready to be activated.
And in oil terms, under the U.S. conception, the Caribbean is seen as a storage and distribution zone for crude oil and derivatives in the entire region, which, of course, only benefits and contributes to U.S. interests.
Therefore, the geopolitical alternative of Petrocaribe, under the conditions of equality throughout the bloc, not only focuses on the purchase and sale of crude oil, but shifts considerations on regional integration based principally on energy security in the region as a whole and on the integral development of each participating nation.
Translation by Internationalist 360°