(Reuters) - U.S. producer ConocoPhillips COP.N and Venezuela's PDVSA have reached a payment agreement over a $2 billion arbitration, the companies said on Monday, suspending a dispute that blocked the state-run company from exporting oil from most of its key Caribbean facilities.

The logo of Venezuelan oil company PDVSA is seen on a tank at Isla refinery in Willemstad on the island of Curacao April 22, 2018. REUTERS/Andres Martinez Casares

The case relates to the nationalization of Conoco assets dating back over a decade in Venezuela. An international court ruled in favor of Conoco in April and ordered PDVSA to pay. But no payment has been forthcoming, leading Conoco to seize most of PDVSA’s Caribbean assets as it sought to enforce its claim.

The settlement means that Conoco will suspend the legal enforcement, as long as PDVSA makes regular payments, spokesman Daren Beaudo said. He declined to say if payments would be made in cash or crude oil, adding that details of the agreement were confidential.

PDVSA confirmed the agreement in a statement, adding that the deal “once again shows PDVSA’s firm will to reach commercial solutions with its creditors.”

The state oil company has also made progress on similar payment agreements with Exxon Mobil Corp XOM.N and NuStar Energy LP NS.N, the two confirmed.

Venezuela’s crude production, a major source of revenue, has fallen to a six-decade low this year as lack of investment, recession and hyperinflation have pushed the OPEC-member country’s economy to near collapse.

The settlement could restore a portion of lost exports by resuming shipping from the Caribbean.

ARBITRATION CASES

Conoco asked the International Chamber of Commerce (ICC) to solve a dispute on the early termination of contracts with PDVSA. The ICC ruled in favor of Conoco in April.

Separately, Conoco brought a claim against Venezuela before a World Bank court over the nationalization of two oil projects. A final ruling on that case before the World Bank’s International Centre for Settlement of Investment Disputes (ICSID) is possible by year end, Conoco has said.

“Having missed payments to bondholders in recent months, PDVSA could have built a cushion for paying Conoco,” said Francisco Monaldi, a Latin American energy researcher at Rice University’s Baker Institute.

“PDVSA will have a break, recovering export capacity in the Caribbean, as long as it continues paying Conoco on time. Conoco could focus now on the wider case, before ICSID,” he added.

Court hearings scheduled for next month in Bonaire and Aruba could have enabled Conoco to begin selling PDVSA assets seized through court attachments. It was unclear if they would go ahead.

In Curacao, where efforts are underway to replace PDVSA as operator of the island’s 335,000-barrel-per-day Isla refinery, the agreement was welcomed by the government, which would now have more options to keep the facility working.

SPLIT PAYMENT

PDVSA agreed to make an initial payment of around $500 million within 90 days of signing the agreement. The remainder is to be paid quarterly over a period of 4-1/2 years, Conoco said in a statement.

Under a new military-led management appointed late last year, PDVSA increasingly has struggled to produce, refine and export crude oil amid a severe lack of cash, and faced sanctions imposed last year by the U.S. government.

Previous agreements by the Venezuelan government and its state-run companies over dozens of arbitrations and legal claims related to late President Hugo Chavez’s nationalizations have mostly ended in renegotiations and legal disputes.

“What makes this situation and Conoco’s claim unique is the amount of creditors lining up behind the very same Venezuelan assets,” Jay Auslander, partner at New-York based law firm Wilk Auslander, said.

“So Venezuela itself has ample reason to take care of the Conoco problem. How this will all play out over time, though, remains uncertain, because Venezuela may simply lack the liquidity to fully perform.”

Conoco said it will make sure that the settlement meets U.S. regulatory requirements, including any applicable sanctions against Venezuela.

Conoco and Exxon Mobil XOM.N left Venezuela after they could not reach deals to convert their projects into joint ventures controlled by PDVSA. The assets were then expropriated.

After receiving two arbitration awards, Exxon said in its most recent quarterly report that the South American country this year finished paying $260 million related to its La Ceiba project.

Separately on Monday, NuStar said it had also reached an agreement with PDVSA that brings the Venezuelan company’s accounts current and cover a year’s worth of storage in the Caribbean.

PDVSA can resume use of the St. Eustatius terminal, NuStar spokesman Chris Cho said in a statement. The storage agreement secures future fees and improves the earnings outlook for the facility, he said.

Conoco shares rose 1 percent to $70.52 on Monday.