Bloomberg News

PDVSA Agrees to Pay Williams, Exterran $420 Million

March 23, 2012

Petroleos de Venezuela SA, the state oil company, said it agreed to compensate Williams Cos Inc. (WMB) and Exterran Holdings Inc. (EXH) for assets nationalized in 2009.

PDVSA, as the Caracas-based company is known, will pay the companies a total of $420 million, Rafael Ramirez, president of the state oil producer, told reporters today in Sucre state. PDVSA will pay 40 percent of the total in cash and the remaining amount in equal parts over four years, according to an e-mailed statement.

Williams, based in Tulsa, Oklahoma, and Houston-based Exterran, operated natural-gas compression and injection facilities in Venezuela.

PDVSA and the U.S. energy companies also signed an agreement today to suspend arbitration claims with the World Bank’s International Centre for Settlement of Investment Disputes that were filed to seek compensation for their assets, according to the statement.

“With the closing of this operation, PDVSA and the Bolivarian Republic of Venezuela show their willingness to reach friendly agreements with foreign investors willing to accept fair compensation as a result of nationalizations,” PDVSA said in the statement.

Venezuelan President Hugo Chavez seized the plants in 2009 as part of a broader nationalization of the industry that began in 2007, when Exxon Mobil Corp. (XOM) and ConocoPhillips (COP) abandoned the South American country after refusing to accept a change of contractual terms. Chavez settled an investment dispute with Mexican cement maker Cemex SAB on Dec. 1.

Jeff Pounds, a Williams spokesman, said he wasn’t immediately able to comment when reached by telephone. Susan Moore, an Exterran spokeswoman, didn’t immediately respond to a voice mail and e-mail seeking comment.

To contact the reporters on this story: Daniel Cancel in Caracas at dcancel@bloomberg.net; Jose Orozco in Caracas at jorozco8@bloomberg.net

To contact the editor responsible for this story: Dale Crofts at dcrofts@bloomberg.net


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