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By Marianna Parraga and Nivedita Bhattacharjee
(Reuters) - U.S. producer ConocoPhillips (COP.N) and Venezuela's PDVSA have reached a payment agreement over a $2 billion arbitration, the companies said on Monday, suspending a dispute that blocked the state-run company from exporting oil from most of its key Caribbean facilities.
The case relates to the nationalization of Conoco assets dating back over a decade in Venezuela. An international court ruled in favor of Conoco in April and ordered PDVSA to pay. But no payment has been forthcoming, leading Conoco to seize most of PDVSA's Caribbean assets as it sought to enforce its claim.
The settlement means that Conoco will suspend the legal enforcement, as long as PDVSA makes regular payments, spokesman Daren Beaudo said. He declined to say if payments would be made in cash or crude oil, adding that details of the agreement were confidential.
PDVSA confirmed the agreement in a statement, adding that the deal "once again shows PDVSA's firm will to reach commercial solutions with its creditors."
The state oil company has also made progress on similar payment agreements with Exxon Mobil Corp (XOM.N) and NuStar Energy LP (NS.N), the two confirmed.
Venezuela's crude production, a major source of revenue, has fallen to a six-decade low this year as lack of investment, recession and hyperinflation have pushed the OPEC-member country's economy to near collapse.
The settlement could restore a portion of lost exports by resuming shipping from the Caribbean.
ARBITRATION CASES
Conoco asked the International Chamber of Commerce (ICC) to solve a dispute on the early termination of contracts with PDVSA. The ICC ruled in favor of Conoco in April.
Separately, Conoco brought a claim against Venezuela before a World Bank court over the nationalization of two oil projects. A final ruling on that case before the World Bank's International Centre for Settlement of Investment Disputes (ICSID) is possible by year end, Conoco has said.
"Having missed payments to bondholders in recent months, PDVSA could have built a cushion for paying Conoco," said Francisco Monaldi, a Latin American energy researcher at Rice University's Baker Institute.
"PDVSA will have a break, recovering export capacity in the Caribbean, as long as it continues paying Conoco on time. Conoco could focus now on the wider case, before ICSID," he added.
Court hearings scheduled for next month in Bonaire and Aruba could have enabled Conoco to begin selling PDVSA assets seized through court attachments. It was unclear if they would go ahead.