Venezuela Takes Aim at Netherlands Treaty Amid Asset Seizures

CARACAS, April 22, 2008 (Dow Jones Newswires)

Venezuela will denounce a mutual investment protection treaty with the Netherlands that lies at the center of disputes with foreign companies over the nationalization of their assets.

The Andean country's Information Ministry said in a statement that the government will denounce later this month how foreign companies "abuse" the bilateral agreement by registering in the Netherlands before doing business with Venezuela. One of those companies is Exxon Mobil Corp. (XOM), the statement said, citing comments from Oil Minister Rafael Ramirez.

Exxon has sought arbitration to secure compensation after President Hugo Chavez decided last year to nationalize key heavy-oil projects, including one controlled by the U.S. company. Earlier this year, the oil giant used the Netherlands agreement to secure a court order for a few weeks freezing more than $12 billion in assets of Petroleos de Venezuela, to secure payment.

Similarly, Mexican cement company Cemex SAB (CX) said Monday it expects to resolve a dispute with Venezuela over the nationalization of its assets following the rules of the Netherlands bilateral treaty.

Chavez ordered the nationalization of the cement industry earlier this month, a decision that affects the units of Monterrey-based Cemex, France's Lafarge SA (LFRGY) and Switzerland-based Holcim Ltd. (HOLN.VX).

Venezuela first signed the investment protection treaty with the Netherlands in 1991. The deal became effective in September 1993, according to details posted on the Venezuelan Foreign Ministry's Web site. It remains unclear what the Chavez administration plans to do regarding the agreement.

CARACAS, April 22, 2008 (Dow Jones Newswires)


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