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Arbitration Court rules in favor of PDVSA in Enel dispute
AP
CARACAS
Petroleumworld.com 03 30 07
Venezuela's state oil company said Thursday that an international court in Paris has ruled against Italian power company Enel SpA in an oil contract dispute.Enel had taken Bitor, a subsidiary of state-run Petroleos de Venezuela SA, or PDVSA, to court after it decided not to renew a contract to supply the Italian company with an expensive boiler fuel called Orimulsion.
PDVSA said in a statement Thursday that "in good faith" it had sent two shipments of Orimulsion to Enel after the contract ended in Dec. 2003 before making a final decision to end the business, but that the Italian company interpreted those shipments as a sign that the contract had in effect been renewed.
The Paris-based International Chamber of Commerce's International Court of Arbitration has ruled in favor of Bitor, and ordered Enel to pay the costs of the legal proceedings, PDVSA said.
PDVSA said the ruling will save it millions of dollars (euros) in potential losses in a no longer profitable business.
PDVSA decided last year to phase out production of Orimulsion, a blend of water and heavy, tar oil from Venezuela's Orinoco River basin.
Venezuela invented Orimulsion in the 1980s as a cheap source of fuel for power plants. But it has since built refineries that can process the Orinoco's tar oil in lighter, much more profitable grades of crude.
AP 29 03 07
Copyright© 2007 AP. All Rights Reserved.
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