U.S. Courts Freeze Venezuela Assets

Courts in the U.S. and Britain have granted requests by ExxonMobil to freeze more than $12 billion in assets of Venezuela’s state oil company, Petroleos de Venezuela (PDVSA).

ExxonMobil is seeking compensation for the nationalization of two oil projects in the South American country by the government of President Hugo Chavez.

“The freezing order prohibits PDVSA from disposing of its assets worldwide up to a value of $12 billion,” ExxonMobil spokeswoman Margaret Ross said in a statement, adding that the company “has also obtained attachment orders from courts in the Netherlands and Netherlands Antilles against PDVSA assets in each of these jurisdictions up to $12 billion.”

ExxonMobil and ConocoPhillips have invested more than $3.5 billion in Venezuelan oil ventures, and both companies filed arbitration requests last year with the International Center for Settlement of Investment Disputes, reports BusinessWeek.

The court actions would make it difficult for the Venezuelan company to transfer assets ahead of the arbitration ruling, which could be years away.

ExxonMobil’s actions come as PDVSA seeks to raise money for its $77 billion investment program to more than double Venezuela’s oil production.

Venezuelan production has declined 25 percent since Chavez took office in 1999, largely because he fired more than 20,000 experienced engineers and executives for joining a 2002-3 walkout seeking Chavez’s removal from office, according to BusinessWeek.

PDVSA’s overall debt now stands at $16 billion, and a Venezuelan newspaper has raised questions about the company’s financial health.