Compass Lexecon Experts Assist ICSID Tribunal Granting $196.2 Million in Damages to ExxonMobil’s Subsidiaries

Compass Lexecon experts Dr. Manuel A. Abdala and Professor Pablo T. Spiller were retained by two ExxonMobil subsidiaries, Mobil Exploration and Development Argentina Inc. (MEDA) and Mobil Argentina S.A. (MASA), to assess damages in their ICSID international arbitration claim against the Argentine Republic. The Claimants sought compensation for the reduction in value of their investments in the upstream natural gas sector in Argentina, because of the government imposing export restrictions and taxes, re-routing dispatch orders and interfering with wellhead price formation.

In a 2016 award made public only in March 2019, the Tribunal followed Dr. Abdala and Professor Spiller’s proposed valuation methodology and relied on their valuation model to determine a compensation to Claimants of US$196.2 million plus six percent interest from March 31, 2014 until the date of payment. The Tribunal relied on the natural gas supply and demand model developed by Dr. Abdala and Professor Spiller to determine the counterfactual wellhead prices applicable to Argentine basins and thus to Claimants’ investments.

Dr. Abdala and Professor Spiller were supported by a Compass Lexecon team led by Ariel Medvedeff and Miguel Nakhle. Claimants were represented by Doak Bishop, Craig S. Miles, Guillermo Aguilar-Álvarez and Silvia Marchili of King & Spalding LLP and Argentine counsels José A. Martínez de Hoz (h.) and Jimena Vega Olmos.