Venezuela\'s PDVSA said on Monday it will pay ExxonMobil Corp $255 million (Dh936.368 million) in compensation for nationalised assets — less than a third of what the US oil giant said it was awarded by an arbitration panel. The South American country\'s state oil company issued a defiant statement saying it was deducting debts owed by Exxon, including PDVSA\'s repurchase of bonds linked to the nationalised project. That cut down the panel\'s original award of $908 million, PDVSA said, adding it would make the payment within 60 days. Paying only $255 million would leave Exxon with only a fraction of the more than $10 billion it originally sought in compensation, and it would be a major victory for Venezuelan President Hugo Chavez that could give oil-producing nations more power in nationalisation disputes with companies. But Exxon may still come away with a larger payment because it is pursuing a separate case against Venezuela before the World Bank\'s arbitration tribunal. Both cases deal with the 2007 nationalisation of the Cerro Negro project in the vast Orinoco heavy crude belt, one of the world\'s biggest crude reserves. This week\'s ruling was made by a tribunal of the Paris-based International Chamber of Commerce, or ICC. \"The decision [by the ICC panel] shows PDVSA was right in believing Exxon Mobil\'s demands were completely exaggerated and sets the payment at a lower amount than what was claimed,\" PDVSA said in its statement on Monday, adding that Exxon\'s original claims were \"lacking any logic\". Compensation Back in September, Venezuela said it had offered Exxon $1 billion in compensation. Last month, Chavez said he would be happy to discuss \"a friendly agreement\". \"The government has always said it is willing to compensate for private investments in sovereign decisions to nationalise strategic assets in the national interest, provided such compensation is fair and reasonable,\" PDVSA said on Monday. An Exxon spokesman said the ICC decision gave the US company $907.6 million \"of real financial benefit\" in the form of debt relief and cash, and that about $160.6 million of Exxon debt had already been credited by the tribunal. \"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,\" Patrick McGinn said by email. The ruling appears to back Venezuela\'s position that companies whose assets are nationalised should be compensated for the amount invested — sometimes called book value — rather than the market value the assets might fetch if sold. \"The award to Exxon Mobil was less than many of us had expected,\" said oil industry analyst Oliver Campbell, a former finance coordinator at PDVSA. \"Venezuela offered to pay Exxon net book value, which Exxon refused. But in the event, the award was not so much higher than net book value.\" Exxon, which held a 42 per cent stake in Cerro Negro, said in 2007 that it had invested about $750 million in the project. In addition to Exxon\'s case at the World Bank tribunal, Venezuela also still faces about 20 claims from companies including another oil major, Conoco-Phillips, resulting from a wave of state takeovers by the Chavez government. Exxon\'s World Bank case is expected to be argued next month.\"If ExxonMobil continues with this second arbitration and its efforts to secure exorbitant compensation for the nationalisation, the Bolivarian Republic of Venezuela will take all necessary steps to defend itself,\" PDVSA said on Monday. The often vicious legal dispute, during which Exxon briefly managed to freeze as much as $12 billion in PDVSA assets, underlined the ideological differences between the US oil giant and Chavez\'s socialist administration. Arbitration ICC AWARDS $908M The US company was awarded nearly $908 million (Dh3.334 billion) by a tribunal of the International Chamber of Commerce (ICC), which calls itself the world\'s leading institution for resolving international business disputes. The ICC does not make its arbitration decisions public, leaving few clues to the criteria behind the valuation. Exxon has said it is still reviewing the more than 400-page document. PDVSA said on Monday that it was deducting $191 million that Exxon owed it for the repurchase of bonds linked to Cerro Negro, $300 million in offshore PDVSA accounts that Exxon had frozen during the dispute, and $160 million that the ICC panel awarded the Venezuelan company in counterclaims.