US sanctions have pulled the plug on Venezuelan oil sales and bond trading; foreign creditors to the Latin American country, sitting on the world’s largest proven oil reserves, have largely been resting idle on their credit notes since 2017. Other types of investors would also be excused for becoming increasingly disgruntled, because even favourable outcomes of lawsuits may not lead to payment under the current leadership of socialist president Nicolás Maduro. International pressure for regime change and negotiation, rather than litigation, may represent their best hope.
There have been a flurry of lawsuits against Venezuela since the expropriation of foreign assets more than a decade ago, with six new lawsuits filed since December 2018, as reported by the Financial Times. But even the largest, most successful claimants are struggling to recover what they are owed. In March 2019, ConocoPhilips won an award of $8.7bn as compensation for the expropriation of its Venezuelan investments in 2017, granted by the World Bank’s International Centre for Settlement of Investment Disputes. But out of the $2bn settlement that followed a favourable arbitration, under the different rules of the International Chamber of Commerce in April 2018, ConocoPhilips managed to recover only $430m by seizing some of Venezuela’s oil assets in the Caribbean sea.
