U.S. producer ConocoPhillips on Monday said Venezuela’s PDVSA agreed to pay $2 billion to settle an arbitration award, suspending a dispute that blocked the state-run oil firm from exporting crude from most of its key Caribbean facilities.
The case relates to the nationalization of Conoco assets dating back over a decade in Venezuela. An international court ruled in favor of ConocoPhillips in April and ordered PDVSA to pay. But no payment has been forthcoming, leading Conoco to seize most of PDVSA’s Caribbean assets as it sought to enforce its claim.
The settlement means that ConocoPhillips will suspend the legal enforcement, as long as PDVSA makes regular payments, spokesman Daren Beaudo said. He declined to say if payments would be made in cash or crude oil, adding that details of the agreement were confidential.
PDVSA confirmed the agreement in a statement, adding that the deal “once again shows PDVSA’s firm will to reach commercial solutions with its creditors.”
Venezuela’s crude production, a major source of revenue, has fallen to a six-decade low this year as lack of investment, recession and hyperinflation have pushed the OPEC-member country’s economy to near collapse.
The settlement could restore a portion of lost exports by resuming shipping from the Caribbean.
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