Venezuela has agreed to pay a $2 billion settlement to US oil giant ConocoPhillips, to stop the seizure of the South American nation's assets, the American firm announced Monday.
PDVSA, the state oil company once the crown jewel of Venezuela's now imploding economy, will make initial payments of $500 million over the next 90 days, ConocoPhillips said in a statement.
In return, ConocoPhillips said it agreed to halt the seizure of PDVSA's oil and assets in the Caribbean -- which it took over after Caracas failed to honor an April 25 ruling by an international arbitrator.
ConocoPhillips said details of its agreement with PDVSA were confidential, but that it does not violate US sanctions against the country.
PDVSA issued a statement saying that negotiations were successful.
The deal underscored PDVSA's commitment to reaching structured settlements with creditors, the statement added.
The dispute dates back to the 2007 takeover of two of the American company's Venezuela units under late president Hugo Chavez.
The company won two international arbitration decisions against Venezuela for the "unlawful and uncompensated expropriation" of its investments in the Hamaca and Petrozuata heavy crude oil projects in the South American nation.
PDVSA has agreed to make quarterly payments for the next four-and-a-half years to settle the $2 billion decision by the International Chamber of Commerce (ICC). It is awaiting a decision by the World Bank's International Centre for Settlement of Investment Disputes (ICSID) on the amount it is owed in the same case.
ConocoPhillips in May seized PDVSA assets in Curacao, Bonaire and Saint Eustace, which oil experts said involved about 15 million barrels of oil, worth around $750 million.
Venezuelan President Nicolas Maduro railed against the action, just another in the growing list of economic problems his country is facing.
As thousands of people flee the country daily, and the news is filled with images of men, women and children digging through trash to find food, the International Monetary Fund has said the nation is facing "economic collapse," and could see inflation of a million percent this year.
And oil output in the founding OPEC member is in free fall, to a 30-year low of 1.5 million barrels a day.
That is a critical for the country, which depends almost entirely on oil to fund government operations.
Both the country and PDVSA have defaulted on international bonds, so it is unclear how the state oil company will repay ConocoPhillips.
A US court earlier this month ruled Canadian mining company Crystallex can seize shares of PDVSA's US-subsidiary Citgo in payment of a $1.2 billion debt.