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Venezuela to Pay ExxonMobil $1.6 Billion

FILE - A sign for the ExxonMobil Torerance Refinery in Torrance, California.

A World Bank arbitration panel has ordered Venezuela to pay $1.6 billion to ExxonMobil for the seizure of a major oil project in the South American country.

The three-member panel granted the award Thursday to the U.S. oil giant for the 2007 expropriation of the Cerro Negro project in Venezuela.

The amount is far below the up to $10 billion ExxonMobil had sought from Venezuela's socialist government.

Venezuelan Foreign Minister Rafael Ramirez characterized the compensation the oil company had originally sought as "outrageous" and "unjustified."

“The ICSIC [International Center for Settlement of Investment Disputes] arbitration tribunal has just issued its final decision in the case, ending unfounded speculation that has been circulating for various years that the Republic would have to pay billions of dollars to ExxonMobil and confirming that the compensation sought after by ExxonMobil for nationalization was always outrageous and completely unjustified, as the Republic has made clear from the beginning of the dispute in 2007,” said Ramirez.

The International Chamber of Commerce previously awarded Exxon more than $900 million in damages for the expropriation of Cerro Negro.

The decision comes at a delicate time for cash-strapped Venezuela, which is already struggling with an economy widely seen as in recession.