U.S. producer ConocoPhillips (COP.N) and Venezuela’s PDVSA have reached a payment agreement over a $2 billion arbitration, the companies said on Monday, suspending a dispute that blocked the state-run company from exporting oil from most of its key Caribbean facilities, Reuters reported.
The case relates to the nationalization of Conoco assets dating back over a decade in Venezuela. An international court ruled in favor of Conoco 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 Conoco 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.”
The state oil company has also made progress on similar payment agreements with Exxon Mobil Corp (XOM.N) and NuStar Energy LP (NS.N), the two confirmed.
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.