Gail Alexan­der

En­er­gy Min­is­ter Stu­art Young said yes­ter­day that at this stage, the State has not been served with any or­der of the High Court re­lat­ed to any Cono­coPhillips mat­ter or ar­bi­tral award.

Speak­ing in the Sen­ate yes­ter­day, Young said that on the ba­sis of the nor­mal prin­ci­ples of com­pa­ny law and in­ter­na­tion­al law, there are no risks to the Drag­on Field project as a re­sult of the ar­bi­tra­tion award to CononoPhillips against PDVSA.

Young was re­ply­ing to queries by Op­po­si­tion Unit­ed Na­tion­al Con­gress Sen­a­tor Wade Mark, who asked about the Drag­on gas field de­vel­op­ment project. Mark not­ed the May High Court de­ci­sion which recog­nised the 2018 ICC ar­bi­tra­tion award to US-based Cono­coPhillips against Venezue­lan state-owned com­pa­ny Petroleos e Venezuela (PDVSA)

Mark sought the li­cen­sor for the li­cence en­tered in­to by Shell and the Na­tion­al Gas Com­pa­ny for the Drag­on project, what were the risks to the project as a re­sult of the recog­ni­tion of the ar­bi­tra­tion award to Cono­coPhillips; when did the Min­istry be­come aware of the ap­pli­ca­tion to the Court for the recog­ni­tion of the ar­bi­tra­tion award; and which oth­er gov­ern­ment min­istries, if any, were in­volved in the mat­ter.

In re­sponse, Young said, “The li­cen­sor for the li­cence grant­ed to Shell Venezuela SA and the NGC Ex­plo­ration and Pro­duc­tion Com­pa­ny in re­spect of the Drag­on field was the Min­is­ter of the Peo­ple’s Pow­er for Pe­tro­le­um on be­half of the Gov­ern­ment of the Bo­li­var­i­an Re­pub­lic of Venezuela. The li­cence, there­fore, was grant­ed by the Gov­ern­ment of the Bo­li­var­i­an Re­pub­lic of Venezuela.

“At this stage, the State has not been served with any or­der of the High Court re­lat­ed to any Cono­coPhillips mat­ter or ar­bi­tral award. The mat­ter ap­pears to still be sub­ju­dice as well as there were re­cent me­dia re­ports that the High Court Judge amend­ed his orig­i­nal or­der.

“How­ev­er, on the ba­sis of the nor­mal prin­ci­ples of com­pa­ny law and in­ter­na­tion­al law, there are no risks to the Drag­on project as a re­sult of the ar­bi­tra­tion award to Cono­coPhillips against PDVSA.”

Young said the ap­pli­ca­tion to the High Court for the recog­ni­tion of the ar­bi­tra­tion award and the sub­se­quent recog­ni­tion of the ar­bi­tra­tion award was made with­out any no­tice to the State or to any oth­er en­ti­ty as it was an ex parte ap­pli­ca­tion.

“The Min­istry was made aware of this de­vel­op­ment when the mat­ter was re­port­ed by var­i­ous me­dia in­sti­tu­tions. As in­di­cat­ed, the ap­pli­ca­tion to the High Court for the recog­ni­tion of the ar­bi­tra­tion award to Cono­coPhillips and the sub­se­quent or­der of the court was made with­out any no­tice to the State. There­fore, no Gov­ern­ment Min­istries were in­volved in the ap­pli­ca­tion to the High Court.”

On fur­ther queries, Young stressed that an ar­bi­tral award against a com­pa­ny, PDVSA, will not af­fect the Venezue­lan gov­ern­ment’s deal­ings with the li­cence for the project which was is­sued to Shell or NGC.