Venezuela ordered to pay Exxon $1.6B

An international arbitration panel has ordered Venezuela to pay ExxonMobil Corp. $1.6 billion for seizing a major oil project as part of a nationalization effort.

The decision by the World Bank panel is only the latest loss for Venezuela’s socialist government in a string of decisions regarding nationalization, The Associated Press reported.

{mosads}Exxon said in a statement that the decision affirms that Venezuela did not sufficiently compensate the company for seizing the Cerro Negro in 2007 after Exxon declined to enter a partnership with the government.

The World Bank has made more than 20 similar decisions regarding former Venezuelan President Hugo Chavez’s push to take government control of the country’s natural resources, AP said.

Just last month, the World Bank handed a $740 million decision to a Spokane, Wash., gold company following a 2008 takeover of a mining project by Venezuela.

The Exxon decision is lower than what the company had asked for, but it will still be difficult for Venezuela to pay it because its oil reserves are declining.

The International Chamber of Commerce has previously awarded Exxon more than $900 million for the Cerro Negro seizure.

Analysts told AP Venezuela is likely to appeal the ruling.