Enbridge seeks arbitration in Venezuela dispute

Reuters, 05.09.03, 12:10 PM ET

CALGARY, Alberta, May 9 (Reuters) - Enbridge Inc. <ENB.TO> has applied to an international tribunal to help wrest a financial settlement from Venezuela's state oil company, which the Canadian pipeline firm says barred it from resuming a contract to run a major oil terminal, Enbridge said on Friday.

Enbridge has a 45 percent stake in the entity that ran the eastern export terminal at Jose, one of Venezuela's biggest, but has not been able to return since the 63-day general strike against President Hugo Chavez began late last year.

Since then, the facility has been operated by replacement workers enlisted by national oil company Petroleos de Venezuela SA, which has had new pro-Chavez managers installed.

"We've applied for arbitration with the International Chamber of Commerce," Enbridge spokesman Jim Rennie said. "They will put a panel together and it will be an arbitration hearing."

This week, Enbridge Chief Executive Pat Daniel said the contract included terms for settlement if his firm is not able to return to operate the facility, which has generated earnings of C$3 million ($2.1 million) annually for Enbridge over the past three years.

But Rennie said PDVSA has not responded to requests to discuss the matter.

"We haven't really received any kind of official word from the new PDVSA management," he said.

PDVSA officials in Caracas were not immediately available for comment.

Earlier this year, Chavez -- his OPEC country's crucial oil exports crippled by the strike -- accused Enbridge of abandoning and sabotaging the Jose facility, which the company has denied.

Rennie said he did not know how long the arbitration might take. "I'm told it's not a fast-moving process," he said.

($1=$1.40 Canadian)