Conoco Is Collecting $2 Billion From Venezuela—One Barrel of Oil at a Time
(Bloomberg) -- ConocoPhillips’ decade-old legal war with Venezuela began paying off this week as the embattled Latin American country started making good on a $2 billion arbitration settlement one barrel of crude at a time.
Venezuela’s state-run oil company has made an initial $345 million payment in “cash and commodities,” Houston-based Conoco said Thursday. The remittance helped allay fears the cash-strapped nation wouldn’t be able to pay off the award in a long-running dispute over asset seizures.
The deal announced in August requires Petroleos de Venezuela SA to make an initial $500 million payment this year. That will include the sale of about $300 million in crude seized in legal actions earlier in 2018, Conoco Chief Financial Officer Don Wallette told analysts on a conference call. PDVSA has also made one $100 million cash payment, with another due in November.
“We have provisions if they miss payments to go back after some of the assets," Chief Executive Officer Ryan Lance added on the call.
People with knowledge of the matter told Bloomberg News on Wednesday that the company has loaded about 1.5 million barrels of PDVSA crude from terminals in the Caribbean. Conoco resold the cargoes to refineries in the U.S. and Asia, the people said.
The remainder of the $2 billion is to be paid out over 4 1/2 years.
The PDVSA payment helped Conoco trounce profit expectations for the quarter. The company’s performance also was boosted by higher commodity prices and production from U.S. shale fields that grew 48 percent year-over-year. The company remains focused on fiscal discipline and shareholder returns, according to Lance.
“This is what the market can expect from us again in 2019,” the CEO said.
More on Conoco’s Earnings
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