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ExxonMobil freezes PDVSA cash
By Upstream staff
US supermajor ExxonMobil has won a court order freezing $12 billion dollars in worldwide assets of Venezuela's state-run producer PDVSA as part of its battle for compensation over Caracas's nationalisation of key oilfields.
The High Court in London yesterday granted ExxonMobil's request to freeze PDVSA's assets.
"The freezing order prohibits PDVSA from disposing of its assets worldwide up to a value of $12 billion," said Margaret Ross, an ExxonMobil spokeswoman.
The company said it has also secured separate orders from courts in the Netherlands and Netherlands Antilles to freeze assets in those jurisdictions of up to $12 billion. A New York court also froze $300 million.
The move freezes some of Venezuela's cash and blocks it from selling billions of dollars worth of assets. News of the court ruling prompted a sell-off of Venezuelan debt.
It was unclear exactly what the impact of the move would be on the day-to-day operations of PDVSA, which critics say is weakened by government's demands it work on social projects, road repairs and food imports.
"Nobody really knows what is the real reach of these decisions, but it doesn't look good for PDVSA, or for the country, which depends on the company for everything, even importing food," one Venezuelan investor, who asked not to be named, told Reuters.
ExxonMobil has requested international arbitration as it seeks compensation from Venezuela after it pulled out of the country when the Orinoco heavy oil patch was nationalised.
In June, the government of President Hugo Chavez passed a law forcing multinationals to give a stake of at least 60% in their Venezuelan operations to PDVSA.
ExxonMobil and Conoco Phillips both refused and withdrew from Venezuela.
Chavez has said Caracas would pay compensation to the affected companies based on the book-price for the assets left behind, and not on the current prices on the oil market.
Court papers suggest the move came as a surprise to PDVSA.
In the court documents, PDVSA's law firm complained that ExxonMobil's lawyers had been "feigning continued co-operation in good faith while another law firm was working behind the scenes preparing this attachment". |
