World Bank Arbitrators Register Eni Vs Venezuela Case

ROME Feb. 20, 2007 (Dow Jones Newswires)

The World Bank's International Center for Settlement of Investment Disputes, or Icsid, registered an application for arbitration lodged by Italy's Eni SpA (E) against Venezuela for the seizure of an oil field.

The case was registered Feb. 6 according to the Web site of Washington D.C.-based Icsid. It writes the case is pending and that a tribunal hasn't been "constituted" yet.

Eni declined to comment Tuesday.

The Rome-based company filed for arbitration last year after the Venezuelan government seized the Dacion field.

Eni lost the field last April after refusing to agree to a contract renegotiation with state firm Petroleos de Venezuela SA, or PdVSA, forced the operators of 32 oil fields to accept minority stakes in new joint ventures dominated by the state firm.

The contract migration was part of a major overhaul of the Venezuelan oil sector towards more state control. The government argued that agreements with foreign companies signed in the 1990s to raise the country's production were contrary to the national interest.

Italian newspaper MF reported Tuesday, without citing sources, Eni was seeking compensation of at least $1 billion in its claim against the field's takeover by the Latin American country.

Last month an Eni spokesman said the company still hadn't decided on the figure to claim as compensation.

Output at the onshore field averaged 60,000 barrels of oil a day, the Italian company said in November.

Eni is seeking at least EUR654 million from Venezuela as compensation for Dacion, according to the company's financial report for the first half of 2006. That figure corresponds to the book value of its assets.

Europe's fourth biggest oil company by market capitalization in November fingered the Dacion confiscation as one of the reasons its third-quarter production was unchanged on the year.

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