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EXXON VS PDVSASubmitted By:

Ashish Goel 14020241019

Bh!" Sh#m $14020241020

P#%shi Gu&t 14020241021'm"ee% Shib 1402024102(

Sethu"th S 14020241024

A#u" )e"o" $ 14020241042

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O&&osi"* P#ties

EXXON OIL COMPANY

Se+o"d l#*est oil +om&"y i" the !o#ld by #e,e"ue

E--o" hs sid it i",ested #ou"d ./0 millio" i"to the e##o Ne*#o +ility3

om&"y hs bee" the sube+t o m"y +o"t#o,e#sies:

the le*lity o the +om&"y5s o#ei*" busi"ess +ti+es3

E--o")obil i"+#esi"*ly d#ills i" te##i"s lesed by di+tto#shi&s

i"lue"+e o" Ame#i+" o#ei*" &oli+y6 "d its im&+t o" the utu#e o "tio"s

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PVDSA

PVDSA$ Pet#7leos de Ve"e8uel6 S3A3 is the Ve"e8uel" stte$o!"ed oil

"d "tu#l *s +om&"y3

Si"+e its i"+e&tio" o" 1 "u#y 19/6 PDVSA hs domi"ted the oil i"dust#y o

Ve"e8uel6 the !o#ld;s ith l#*est oil e-&o#te#3

PDVSA o,ides the *o,e#"me"t o Ve"e8uel !ith subst"til u"di"* #esou#+es3

Du#i"* 19

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?he Dis&ute

Ve"e8uel5s "e! &et#oleum l!s i" 200/6 u"de# !hi+h o#ei*" +om&"ies !ouldh,e to be+ome mi"o#ity t"e#s !ith PDVSA i" the oi"t ,e"tu#e3

E--o" did"5t *#ee to the te#ms "d the ,e"tu#e !s o#+eully "tio"li8ed3

?he *o,e#"me"t sei8ed the o&e#tio"s "d ssets o the e##o Ne*#o P#oe+t "d*,e them to PDVSA subsidi#y3

?he "tio"li8tio" o !ht used to be E--o";s 413@ st%e i" Ve"e8uel"O#i"o+o 'i,e# belt oil oe+t +lled e##o Ne*#o6 o# !hi+h +om&"y +lims it !s"ot ully +om&e"sted3

PDVSA +lled E--o";s +lims e-**e#ted "d sid they deied lo*i+3 So +om&li"t !s lod*ed *i"st PVDSA i" C C"te#"tio"l hmbe# oomme#+e

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h#o"olo*i+l O#de# o Dis&ute

C" 200/ e##o Ne*#o P#oe+t !s "tio"li8ed "d h"ded o,e# to PDVSA$e##o

Ne*#o3

E--o" e-ited #om ll the oe+ts i" the +ou"t#y lod*ed +om&li"t *i"st

PDVSA i" C"te#"tio"l e"t#e o# the Settleme"t o C",estme"t Dis&utes CSCD3

O" Feb#u#y / 2009 E--o" )obil o#&o#tio" +hie,ed #ee8e o .12 billio" o

ssets o PVDSA i" B#itish +ou#ts3

E--o" )obil st#ted #bit#tio" o+edu#e *i"st PVDSA i" C te# the #ee8e

o ssets3

?he #ee8e !s o,e#tu#"ed by =33 +ou#t i" )#+h 20096 ledi"* E--o" to #edu+e

its #bit#tio" +lim to ./ billio" i" 20103

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E--o"5s lims

C" the 1990s6 be+use o de+li"i"* oil odu+tio"6 PDVSA "d the Go,e#"me"ti",ited )obil N "d othe# o#ei*" oil +om&"ies to e"te# i"to oi"t ,e"tu#es to

de,elo& He,y Oil #ese#,es3

C" o#de# to tt#+t i",estme"ts +o"t#+tul ote+tio"s li%e : PDVSA$N;s

+ommitme"t6 *u#"teed by PDVSA6 to i"dem"iy )obil N o# "y e-oitio"

o# sei8u#e o its i"te#ests "d o# othe# Dis+#imi"to#y )esu#es im&osed by the

Go,e#"me"t !e#e *i,e"3

C" lte 2004 the Go,e#"me"t #e,o%ed the 'oylty 'edu+tio" A*#eeme"t tht it hd

+o"+luded !ith i",esto#s i" HO oe+ts3

C" 2006 the Go,e#"me"t im&osed "e! e-t#+tio" t- tht u#the# #ised the

#oylty #teI it i"+#esed the i"+ome$t- #te des&ite +ommitme"t "ot to do soI

C" 200/6 the Go,e#"me"t too% the ultimte ste&3 Ct sei8ed the o&e#tio"s "d ssetso the e##o Ne*#o P#oe+t "d *,e them to PDVSA subsidi#y

Go,e#"me"t sei8ed )obil N;s e"ti#e i"te#est i" the oi"t ,e"tu#e !ithout &yi"*

+om&e"stio"3

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Contd.. )obil N &e#o#med its t o the b#*i": its l#*e i",estme"t o mo"ey6

te+h"olo*y "d %"o!$ho! su++eeded beyo"d e-&e+ttio"s "d mde the P#oe+t hi*hly oitble oi"t ,e"tu#e3

By +o"t#st6 h,i"* ++e&ted "d be"eited #om )obil N;s t o the b#*i"6

h,e dis+limed the obli*tio"s they u"de#too% i" the A*#eeme"t "d the Gu#"ty3

?he e-oitio" dei,es )obil N o the +h"+e to be"eit #om the #is%s it

i"+u##ed !he" it +ould "ot be %"o!" !hethe# the P#oe+t !ould su++eed3 Fo# e,e#y

su++essul i",estme"t i" the oil i"dust#y6 the#e #e multi&le ilu#es3 ?he su++esses

must ++o#di"*ly o,ide l#*e #etu#"s to i""+e the m"y u"+e#ti" ,e"tu#es tht

must be u"de#t%e" to odu+e the e! su++esses3

PDVSA !ill e"oy billio"s o doll#s o #e,e"ue *e"e#ted by the i",estme"t6

te+h"olo*y6 "d %"o!$ho! tht )N b#ou*ht to the e##o Ne*#o P#oe+t3

EXXON sue#ed loss i" the #"*e o .12 billio" due to e-oitio" bsed o" them#%et ,lue !hi+h "eeds to be #eimbu#sed3

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PDVSA5s Dee"se E--o")obil &e"tly lso !"ts to use this +se to build " #*ume"t su&&o#ti"*

utu#e sei8u#e o the 0@ i"te#est o PDVSA subsidi#y i" the hlmette #ei"e#y i"Jouisi"3

lim"t ese"ted its +lim o# &u#&oses o obti"i"* the !o#ld!ide #ee8i"* o#de#

"d tt+hme"ts i" ,#ious u#isdi+tio"s i" " i"&oite ttem&t to &&ly u"due

essu#e i" "e*otitio"s3

lim"t;s ltest +l+ultio" o dm*es +o"stitutes *#oss e-**e#tio" o themou"t o its lle*ed loss "d disto#tio" o the ,e#y o#mul u&o" !hi+h it #elies3

?he ull ,lue o lim"t;s e"ti#e i"te#est i" the P#oe+t6 e,e" !ithout +o"side#i"* o#

*i,i"* ee+t to the limittio" o libility i" the *#eeme"t6 !s less th" =S.1

billio"3

PDVSA #e+o*"i8es the +t tht the &et#oleum &oli+y o the +ou"t#y is the so,e#ei*"

#i*ht o the +ou"t#y6 the *#eeme"t +omes u"de# it3

Go,e#"me"t hs l#edy o,ided +om&e"stio" i" the o#m o u"&id bo"ds o the

+om&"y !hi+h *o,e#"me"t &u#+hsed "d the i",e"to#ied oil !hi+h +om&"y

e-&o#ted3

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?he Ve#di+t C !#ded E--o" )obil o#&3 bout .90< millio" i" ,e#di+t o,e# oil ssets

"tio"li8ed by Ve"e8uel" P#eside"t Hu*o h>,e8 i" 200/3

E--o" )obil hd e,iously used i"te#"tio"l +ou#ts to #ee8e bout .(00 millio"3

om&"y lso hs debt o .191 millio" #elti"* to i""+i"* o " oil oe+t i" the

+ou"t#y3

Also Exxon had a debt of $160 million that the arbitration tribunal

said was due to PDVSA.

So i" esse"+e PDVSA hd to &y .2 millio" o# +om&e"stio" o e-oiti"*E--o"5s ssets i" the +ou"t#y3

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