Business | Oil & Gas
Exxon wins freeze on Venezuelan assets
ExxonMobil Corp has won court orders freezing up to $12 billion in Venezuelan assets around the world as it fights for compensation for operations lost to President Hugo Chavez's nationalisation drive.
- Reuters
- Published: 01:04 February 9, 2008
New York: ExxonMobil Corp has won court orders freezing up to $12 billion in Venezuelan assets around the world as it fights for compensation for operations lost to President Hugo Chavez's nationalisation drive.
The largest US company sought the asset freeze to guarantee repayment should it win arbitration over the Cerro Negro heavy oil project.
The move is the boldest challenge yet by an international oil major against any of the governments around the world that have moved to increase their holds on natural resources as energy and commodity prices have soared.
"To me it sounds like a very aggressive tactic," said Stephen Zamora, professor of international law at the University of Houston Law Centre.
"I can't really say that I'm aware this has been used in other investment disputes. They may be trying to get the government to settle."
Worldwide
Exxon - which last week posted the largest ever year's profit by a US company - said on Thursday it has received court orders in Britain, the Netherlands and the Netherlands Antilles, each freezing assets of Venezuela state oil firm PDVSA. An Exxon spokes-woman said the total that could be frozen worldwide was $12 billion.
Exxon also won a court order from the US District Court for the Southern District of New York in December freezing more than $300 million belonging to PDVSA, seeking to guarantee repayment should it win the arbitration.
PDVSA, one of the largest suppliers of crude oil to the US, was not immediately available for comment. The White House and the US State Department also declined to comment.
Chavez, who regularly clashes with the Bush administration, took over ExxonMobil and Conoco-Phillips stakes in multibillion-dollar heavy oil projects in Venezuela's oil region last June. The move was part of the left-wing leader's drive to nationalise key industries including utilities and telecommunications companies owned by private companies.
The news comes as a blow to Chavez, who suffered a stinging defeat in a December referendum that would have let him run indefinitely for reelection and enshrine socialism as the nation's economic system.
PDVSA is facing growing debt and operational problems that analysts attribute to underinvestment caused by the company's contributions to Chavez's social programmes.
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