After months of legal wrangling over a refinery, the case of PDV Sweeney vs. ConocoPhilips results in a win for the responder which received as an award an amount of $10 million.
Texas Lawyer gives the backdrop of the case which had been filed in the U.S. District Court for the Southern District of New York. Recent developments in the oil industry such as the decreasing prices of oil that can led to loss of revenue, rising prices caused by technological upgrade, and the need to increase captial cost, have led companies like ConocoPhils Co. and PDV Sweeney to form joint ventures. The joint venture partnerships are meant to mitigrate risks while ensuirng business continuity if not profitablity.
In this case, PDV Sweeny and PDV Texas Inc., which later became the petitioners, provided oil from Venezuela to the eventual respondents ConocoPhils Co. and Sweeny Coker Investor Sub., which were in charge of converting this crude raw material into saleable oil. The plant where the oil was converted was based in Houston, which is also the location of CoconoPhils Co. The case began prior to September 2015, when the petitioners asked the court to make their partners vacate their share of the "partial" award in relation to the oil refinery. ConocoPhils Co. and Sweeny Coker countered with a request to confirm the ownership and worth of the "partial" and "final awards," at the same time determining explicitly the monetary awards to be issued to the respondents.
Upon re-examination of both the "patial" and "final awards," the Court issued a list of rewards to be issued in favor of the respondents, amounting to a total of $10 million.
Prior to this settlement, this case and its background had been saddled with complications. In a related report filed by Law 360, the Venezuelan government had appropriated illegally ConocoPhilips' oil-related properties and other services in 2007. This in turn triggered several arbitrations between the Houston company and Venezuela that often related to wins by the former and which the latter always sought to appeal.
Eurasia Review ominously hints that Venezuela will have to contend with similar issues in the future and is currently preparing to protect itself. The oil-rich but cash-strapped nation has declared that it will no longer allow foreign companies to invest in its properties if this means being dragged to international courts later on due to disputes and other arbitrations.
