By Alexandra Ulmer and Corina Pons

CARACAS (Reuters) - A World Bank arbitration tribunal on Thursday ordered Venezuela to pay Exxon Mobil Corp around $1.6 billion to compensate for the 2007 nationalization of its oil projects in the country.

The amount is far below the up to $10 billion that Exxon had originally sought and the $6 billion at which the World Bank's International Centre for Settlement of Investment Disputes (ICSID) capped the case, excluding a tax claim.

"The Tribunal has found that the expropriation was conducted in accordance with due process, that it was not carried out contrary to undertakings given to the claimants in this respect and that the claimant have not established that the offers made by Venezuela were incompatible with the 'just' compensation requirement of (...) the Bilateral Investment Treaty," ICSID said on its website.

In a brief statement, Exxon said the decision vindicated its view that Venezuela failed to compensate it fairly at the time.

Several analysts said Venezuela's socialist government had dodged a bullet with the award, although it was also not clear whether it would pay up or seek to annul the award. Venezuela withdrew from the ICSID in 2012.

"The government is going to analyze whether to seek annulment or not," said Diego Moya-Ocampos of IHS risk consultancy.

"Given Exxon originally wanted $10 billion, this will likely be interpreted as a victory for the government. The government could offer Exxon the PDVSA refinery in Chalmette, Louisiana, which they operate together, as a form of payment."

Experts think it is unlikely Venezuela would win an attempt to nullify the award, though such a move could buy the OPEC member some time and potentially allow for parallel negotiations over a possible settlement.

Venezuela's state oil company PDVSA [PDVSA.UL] declined to comment and no one at the oil ministry was immediately available.

A separate decision by another international arbitration body, the Paris-based International Chamber of Commerce (ICC) had ordered PDVSA to pay Exxon $908 million.

The ICSID award suggests avoidance of double payments, but does not directly mention the ICC award. Banking accounts PDVSA had used to pay previous awards had been frozen.

DELICATE FINANCES

The decision comes at a delicate time for cash-strapped Venezuela, already struggling with an economy widely seen as in recession, rampant inflation and looming bond payments.

"As a practical matter, I highly doubt Venezuela will comply with the ruling and pay the $1.6 billion," said Pavel Molchanov, an oil company analyst with Raymond James.

"While the current government of (Nicolas) Maduro is less antagonistic toward foreign investment than (late President Hugo) Chavez had been, the fact of the matter is it is still antagonistic. I would not be holding my breath for Exxon to receive a $1.6 billion check from the Venezuelan treasury."

The ICSID decision relates to the expropriation of the Cerro Negro project, the La Ceiba project, as well as "production and export curtailments" imposed on the Cerro Negro development in 2006 and 2007.

Each party will cover its own costs and counsel fees, ICSID said. The tribunal said it had no jurisdiction over "the claim arising out of the increase in the income tax rate for the participants to the Cerro Negro Project."

"The most important part of the decision is that the arbitration tribunal rejects the alleged "illegal" nature of the expropriation," said Carlos Bellorin, petroleum analyst at IHS, meaning the compensation only reflects the value of the assets, not alleged damages and prejudice caused.

"However, it is presumed the calculation method was not the one Venezuela suggested," he said. Exxon's projects were taken over during the left-wing administration of Chavez, who led a wave of nationalizations that included the oil, electricity and steel industries.

Many of the companies deemed the takeovers unlawful expropriations, and Venezuela is facing more than 20 cases arbitration cases over the nationalizations.

ConocoPhillips brought the biggest case to date against Venezuela in 2007, seeking $30 billion in compensation.

A partial decision in 2013 determined Venezuela failed to act in good faith or properly compensate ConocoPhillips for three big oil assets. A final decision is expected soon.

Proponents of the nationalizations argue commodities-rich Venezuela should have the right to administer its own resources to try to improve living standards.

(Reporting by Alexandra Ulmer and Corina Pons in Caracas; and Marianna Parraga and Anna Driver in Houston; Editing by Diane Craft, Chizu Nomiyama and Marguerita Choy)