UPDATE 1-Venezuela did not pay ConocoPhillips for assets -World Bank
HOUSTON, Sept 4 (Reuters) - A World Bank arbitration panel said on Wednesday that Venezuela failed to act in good faith or pay ConocoPhillips for three big oil assets the country seized in 2007.
The partial ruling limited the scope of the company's claims by excluding future tax credits, and did not determine how much money Venezuela must pay the U.S.-based company. A final ruling on damages could take one or two more years.
The company's projects were taken over during the leftwing administration of deceased former President Hugo Chavez, who led a wave of nationalizations that included the oil, electricity and steel industries.
"The respondent breached its obligation to negotiate in good faith for compensation for its taking of the ConocoPhillips assets in the three projects on the basis of market value," the ruling of the International Centre for Settlement of Investment Disputes (ICSID) said.
The company claimed victory.
"This ruling sends a clear message that countries cannot expropriate their investments without fair compensation," said Janet Langford Kelly, a senior vice president of the company.
ConocoPhillips initially asked Venezuela for $30 billion in compensation for its stakes in the Hamaca and Petrozuata heavy crude upgraders and a separate offshore project called Corocoro, but Venezuela offered no more than $2 billion.
In 2007, ConocoPhillips took a after-tax charge against its earnings of $4.5 billion related to its properties in Venezuela. At the time, the Houston-based company said it believed the assets were worth much more, but that was the amount allowed under U.S. accounting rules.
Venezuelan Petroleum Minister Rafael Ramirez harshly criticized the panel and ConocoPhillips.
"We reject the tribunal's affirmation that we did not negotiate in good faith. We reached deals with other companies, such as Chevron," he said.
Several major foreign oil companies, including Chevron Corp , reached agreements with the Chavez government to pay higher taxes and royalties, and give up majority stakes in projects while hanging onto minority ones.
ExxonMobil Corp and ConocoPhillips did not reach accords with Venezuela and eventually pressed their claims in arbitration.
Ramirez said he would ask for a new chance to show the panel that the country acted in good faith.