Monday, January 02, 2012

Exxon awarded $908m for lost assets - Business - The Boston Globe

Exxon awarded $908m for lost assets - Business - The Boston Globe:

Towards the end of Corporate Finance we generally talk about International Finance and go into some detail on the risks involved in doing business internationally. For instance we talk about expropriation and nationalization. Technically expropriation can be done with monetary reimbursements or not. Nationalizations tend to be for money. However, the lines often blue as in the case of Venezuela for their nationalization of many business over the past decade where assets were nationalized at below market rates and often breaking existing contracts. Such was the case with Exxon Mobile that has now won a case that the money was not sufficient to make up for the broken contracts.

From the Boston Globe:

"An international arbitration body has awarded Exxon Mobil Corp. nearly $908 million in a dispute with Venezuela over compensation for the nationalization of its assets, the company said yesterday.

President Hugo Chávez’s government nationalized an oil project in the country in 2007.

The decision, by the International Chamber of Commerce, confirmed that state oil company Petroleos de Venezuela SA “does have a contractual liability to Exxon Mobil,’’ company spokesman Patrick McGinn said in an e-mail. He said the award is for $907,588,000."

BTW if you are looking for other countries where nationalizations have occurred, Wikipedia has a good list.
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