In 2014, ConocoPhillips filed a separate and independent
arbitration under the rules of the ICC against
PDVSA under the contracts that had established the
Petrozuata and Hamaca projects.
The ICC Tribunal issued
an award in April 2018, finding that PDVSA owed
ConocoPhillips
ConocoPhillips approximately $
2
agreements in connection with the expropriation of the
projects and other pre-expropriation fiscal
measures.
In
August 2018, ConocoPhillips entered into a settlement with PDVSA to recover the full amount of this ICC
award, plus interest through the payment period, including initial payments totaling approximately $500
$500 million within a period of 90 days from the time of signing of the settlement agreement. The balance of the
the settlement is to be paid quarterly over a period of four and a half years.
To date, ConocoPhillips has
receivedreceived approximately $
754
$754 million.
Per the settlement, PDVSA recognized the ICC award
as a judgment in
various various jurisdictions, and ConocoPhillips agreed
to suspend its legal enforcement actions.
ConocoPhillips sent
noticesnotices of default to PDVSA on October 14 and November
12, 2019, and to date PDVSA
has failed to cure its
breach.a result, ConocoPhillips has resumed legal enforcement
actions.
ConocoPhillips has ensured that
thethe settlement and any actions taken in enforcement
thereof meet all appropriate U.S. regulatory
requirements,
including those related to any applicable sanctions
imposed by the U.S. against Venezuela.
In 2016, ConocoPhillips filed a separate and independent
arbitration under the rules of the ICC against
PDVSA under the contracts that had established the
Corocoro
Project.project.
On August 2, 2019, the ICC Tribunal
awarded ConocoPhillips approximately $
33
million plus interest under the Corocoro contracts.
ConocoPhillips is seeking recognition and enforcement
of the award in various jurisdictions.
ConocoPhillips
has ensured that all the actions related to the award
meet all appropriate U.S. regulatory requirements,
including those related to any applicable sanctions
imposed by the U.S. against Venezuela.
The Office of Natural Resources Revenue (ONRR) has
conducted
conducted audits of ConocoPhillips’
payment of
royalties on federal lands and has issued multiple
orders to pay additional royalties to the federal
government.
ConocoPhillips
has appealed theseand the ONRR entered intoa settlement agreement on March 23, 2021,to resolve the dispute.All orders and
stronglyassociated appeals have been withdrawn
objects to the ONRR claims.The appeals are pending with
the Interior Board of Land Appeals (IBLA),except for one order that is the subject ofa lawsuitConocoPhillips filed in 2016 in New Mexico federalcourt after its appeal was denied by theIBLA.prejudice.
Beginning in 2017,
cities, counties, governmentsgovernmental and other entities
in several states in the U.S. have
filed lawsuits against
filedoillawsuits against oil and gas companies, including
ConocoPhillips,
ConocoPhillips, seeking compensatory damages
and equitable
andequitable relief to abate
alleged climate change impacts.
Additional lawsuits with similar allegations
are
expected to be filed.
The
amounts claimed by plaintiffs are unspecified and
the legal
the legal and factual issues
involved in these cases are
unprecedented.
ConocoPhillips believes these lawsuits are
factually
factually and legally
meritless and are an
inappropriate vehicle to address
the challenges associated
with climate
change and will
vigorously defend
against such lawsuits.
Several Louisiana parishes and the State of Louisiana
have filed
43
lawsuits under Louisiana’s State and Local
Coastal Resources Management Act (SLCRMA)
against oil and gas companies, including ConocoPhillips,
seeking compensatory damages for contamination
and erosion of the Louisiana coastline
allegedly caused by
historical oil and gas operations.
ConocoPhillips entities are defendants in
22
vigorously defend against them.
Because Plaintiffs’ SLCRMA theories are unprecedented,
there is uncertainty
about these claims (both as to scope and damages)
and any potential financial impact on the company.
In
2016, ConocoPhillips, through its subsidiary, The Louisiana Land and ExplorationCompany LLC,submitted claims as the largest private wetlands owner in Louisianawithin the settlement claimsadministration process related to the oil spillin the Gulf of Mexico in April 2010.In July 2020, the claimsadministrator issued an award to the company which,after fees and expenses, totaled approximately$90
million,which was received in the third quarter of 2020.In October 2020, the Bureau of Safety and Environmental
Enforcement (BSEE) ordered the prior owners of
Outer Continental Shelf (OCS) Lease P-0166, including
ConocoPhillips, to decommission the lease facilities,
including two offshore platforms located near Carpinteria,
California.
This order was sent after the current
owner of OCS Lease P-0166 relinquished the
lease
lease and abandoned the lease platforms
and facilities.
PhillipsBSEE’sorder to ConocoPhillips is premised on its connectionto Phillips Petroleum Company, a legacy company of
ConocoPhillips, which held a historical
25
percent interest in this lease and operated
theselease facilities, butsold its interest approximately
30 years
ago.ConocoPhillips has not had any connectionto the operation or production on this lease since that time.ConocoPhillips is challenging this order.