The US Federal District Court for the District of Columbia has entered a default ruling against Venezuela, after the South American country failed to respond in time to a demand introduced by Gold Reserve Inc. The Canadian gold mining firm is seeking to confirm a US$740 million arbitration made in its favor by the International Center for Settlement of Investment Disputes (ICSID) over the expropriation of its operations in Venezuela in 2008.Not quite as easy as taking candy from a baby;
Doug Belanger, president of Gold Reserve, stated that “this is another example of Venezuela being dilatory in its actions regarding the payment of the award.”
Gold Reserve had invested about $300 million since 1992 to develop the gold and copper mines at Proyecto Brisas, estimating there were 10 million ounces of gold and 1-1/2 billion pounds of copper. Then, in 2008, Venezuela revoked the concession, arbitrarily. Which was getting to be a habit with them.“The company will continue to pursue the collection of our award in a systematic and methodical way until Venezuela realizes that its needs to stop avoiding its international obligations and pay the award, sooner rather than later,” he added.
Firms have filed 27 claims against Venezuela in the ICSID, making it the country with the most cases pending in the international tribunal. Five have already been resolved, involving a total payment of $2.12 billion.Which is a drop in the bucket. Conoco Phillips has a demand for $31 billion over the nationalization of its operations in the Orinoco oilfield (now renamed the Orinoco Hugo Chávez Oil Field). And;
Gold mining firm Rusoro has similarly presented a demand for $3.3 billion, and Argentina’s Grupo Techint has produced another for the nationalization of its operations in the steel sector. The total amount to be paid by Venezuela as a result of its nationalization policy, after negotiations with overseas claimants, could reach $20 billion.
As Maggie Thatcher said, the problem with socialism is that eventually you run out of other people's money;
The Venezuelan government’s total debt is some $125 billion, with the debt contracted by state petroleum firm PDVSA amounting to an additional $50 billion.
Venezuela will have to pay $25 billion just to service these commitments in 2015. “The government has a cash deficit that it can’t deal with, and it’s playing for time with counter-claims and temporary payments,” Venezuelan economist Asdrúbal Oliveros signaled.