SOUTH AMERICA“EXPROPRIATION”

Aurelio Fernández- ConchesoCMA 2010

• L America Latina

Problem Remains-. Political Approach

-. Legal Stability

Growthfostered

by improvement ofthe legal systems

Need of-. Reliable legal provisions

-. Reliable judicial structures

Expropriations and confiscationsa risk in some areas

Venezuela

VENEZUELALake Maracaibo

360 + vessels expropriated with no payment74 + owners expropriated with no payment

Organic Law that reserves to the State goods and services related to the primary activities of oil

Article 2.The assets and services related to the performance of primary activities as

provided for in the Organic Law of Hydrocarbons, which were previously carried out directly by Petroleos de Venezuela, S.A. (PDVSA) and its subsidiaries, which were latter outsourced and are essential for the development of its activities, are reserved to the State. Assets and services referred to in this article are:

3. Those related to the activities in Lago de Maracaibo: launches for transportation of personnel, divers and maintenance; barges with crane for transportation of materials, diesel, industrial waters and other supplies; tugs; flat barges; transportation for buoys; gravel cranes;  layout of underwater pipelines and cables; maintenance and dry docks; berth and docks of any nature.

Up to nowNO PAYMENT

Up to now29 vessels sinked

60 vessels opperational

From 400.000 barrels To 150.000 barrels

-. Foreign Flag-. Double Flag

-. Venezuela Flag

-. No contracts-. Spot contracts-. Charter parties

JWC Hull War, Strikes, Terrorism and Related Perils Listed Areas (11 June 2009)

Africa Djibouti excluding transit Somalia, including waters out to 250 nautical miles from the eastern Somalia coast south of Latitude 10° N. Indian Ocean, beyond the eastern Somalia and Gulf of Aden areas out to 600 nautical miles from the coast of eastern Africa, south of latitude 15° N and north of latitude 10° S, but excluding the coastal waters of Kenya and Tanzania up to 12 nautical miles offshore. Ivory Coast Nigeria, including all Nigerian offshore installations

Asia Pakistan Sri Lanka Thailand, but only the area of the southern Gulf coast between the ports of Songkhla and Narathiwat inclusive Eastern Europe Georgia

Indonesia / Malaysia The island of Ambon (Seram) The port of Balikpapan (SE Borneo) including waters out to 25 nautical miles Borneo, but only the north east coast between the ports of Kudat and Tarakan inclusive The port of Jakarta The port of Poso (Sulawesi) Sumatera (Sumatra), but only the North Eastern coast between 5º 40' N and 0º 48' N, excluding transit

Middle East Bahrain excluding transit Gulf of Aden, area as defined overleaf Iraq, including all Iraqi offshore oil terminals Israel Lebanon Qatar excluding transit Saudi Arabia excluding transit

Yemen Philippines, but only Mindanao, between the ports of Polloc Harbour and Mati inclusive Sulu Archipelago including Jolo, as defined overleaf South America Venezuela, including all offshore installations in the Venezuelan EEZ

INSTITUTE WAR AND STIKES CLAUSESHulls – Time

This insurance is subject to English law and practice

1 PERFILSSubject always to the hereinafter referred to, this insurance covers loss of or damage to the Vessel caused by

1.1 war civil revolution rebellion insurrection, or civil strife therefrom, or any hostile act by or against a belligerent power

1.2 capture seizure arrest restraint or detainment, and the consequences thereof or any attempt thereat

1.3 derelict mines torpedoes bombs or other derelict weapons of war1.4 strikes, locked-out workmen, or person taking part in labour disturbances, riots or civil

commotions1.5 any terrorist or any person acting maliciously or from a political motive1.6 CONFISCATION OR EXPROPRIATION

2 EXCLUSIONS

This insurance excludes

5.1 loss damage liability or expense arising from

5.1.1 the outbreak of war (whether there be a declaration of war or not) between any of the following countries

United Kingdom, United States of America, France, The Russian Federation, The People´s Republic of China

5.1.2 requisition, either for title or use, or pre-emption

5.1.3 capture seizure arrest restraint detainment confiscation or expropriation by or under the order of the government or any public or local authority of the country in which the Vessel is owned or registered

All port operatorExpropriated without payment

RemediesICSID

ArbitrationWashington DC

RemediesRule B

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