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Venezuela said it would only need to pay $255 million of the $907 million awarded to ExxonMobil in an international arbitration case over the nationalization of the US oil giant's assets.

The award amount by the Paris-based International Chamber of Commerce panel was far below the $12 billion sought by the oil titan for nationalization of key fields in the Orinoco basin region that included two ExxonMobil operations.

A statement by the state-owned oil firm Petroleos de Venezuela (PDVSA) said the government would pay $255 million to the US firm within 60 days to settle the dispute.

The statement hailed what it called a "successful defense" against the ExxonMobil claims and said the US giant had been seeking an "exorbitant" sum for compensation.

It noted that ExxonMobil was pressing arbitration before a World Bank panel and said Venezuela "will take all necessary steps to defend itself" if the company pursues the case.

It said ExxonMobil's claims were "completely exaggerated and defied logic."

From the $907 million, Venezuela plans to deduct a number of charges including $191 million for the impact of ExxonMobil's withdrawal on the state's bonds, $300 million for the freezing of PDVSA assets in the United States and $160 million in counter-claims by Venezuela.

ExxonMobil spokesman Patrick McGinn said the company recognizes "Venezuela's legal right to expropriate assets subject to compensation at fair market value."

"Approximately $160.6 million of ExxonMobil debt has already been credited by the tribunal," McGinn said in an email.

"The remaining $746.9 million could be paid through a combination of approximately $305 million in PDVSA funds already held for this purpose by New York courts, PDVSA's cancellation of additional project debt owed by ExxonMobil and payment of additional cash," he said.

The biggest US oil firm launched a series of legal challenges after the leftist government of President Hugo Chavez moved to nationalize foreign oil firms' assets.

In June 2006, Venezuela passed a law forcing foreign oil companies to give PDVSA at least a 60 percent share in their operations at oil fields in the Orinoco basin.

Some companies accepted compensation for the move, but ExxonMobil and ConocoPhillips disputed it.

"It is a smashing success for PDVSA because Exxon really was seeking a small amount," oil sector analyst Rafael Quiroz told AFP.

At one point during the lawsuit, PDVSA was close to agreeing to pay out $5 billion, said Quiroz, a former official with the state oil giant.

AFP