Venezuelan President Hugo Chavez announced Sunday that his country will only pay ExxonMobil a fraction of the amount awarded last week by the International Chamber of Commerce in compensation for having seized the oil giant's Venezuelan assets.
According to International Business Times, ExxonMobil was awarded $907.6 million by the ICC -- $747 million of which remained to be paid -- but Chavez maintains the compensation amount was lowered to $250 million.
Chavez went on to announce that his government will not recognize any ruling by the World Bank's International Center for Settlement of Investment Disputes, in which ExxonMobil is hoping to collect upward of $12 billion - what the company thinks it's owed in damages after the country nationalized its assets - in a pending arbitration case.
We will not recognize any ICSID decisions. They are trying the impossible: to get us to pay them," Chavez said in the statement. "We will not bow down to imperialism and its tentacles."
In 2007, Chavez nationalized oil assets in the Orinoco River Basin, a policy that Fedel Gheit, an analyst with Oppenheimer, said essentially shoots Chavez in the foot.
"This is like highway robbery," Gheit said. "That is not how you attract capital."
In the end, according to Gheit, Venezuela is robbing itself of possible billions in dividends that ExxonMobil would have paid to the country over the lifespan of the oil field.
"Had he waited, he would be better off than where he is now," Gheit said. "Exxon as a corporation has lasted more than a dozen regimes, including Venezuela. There is no regime that has outlasted Exxon. Eventually, you have to settle."