Venezuela Denies Oil Assets Frozen: Financial News - Yahoo! Finance

Venezuela Denies Oil Assets Frozen: Financial News - Yahoo! Finance
AP
Venezuela Denies Oil Assets Frozen
Friday February 8, 6:09 pm ET By Fabiola Sanchez, Associated Press Writer

Venezuela Oil Minister Dismisses Exxon Mobil Court Orders As 'Judicial Terrorism'

CARACAS, Venezuela (AP) -- Venezuela's top oil official accused Exxon Mobil Corp. of "judicial terrorism" on Friday, but said court orders won by the oil major do not amount to confiscation of $12 billion (8.3 billion euros) in assets.

Exxon Mobil has gone after the assets of state oil company, Petroleos de Venezuela SA, in U.S., British and Dutch courts as it challenges the nationalization of a multibillion dollar (euro) oil project by President Hugo Chavez's government.

A British court last month issued an injunction "freezing" as much as $12 billion (8.3 billion euros) in assets.

But Oil Minister Rafael Ramirez said: "They don't have any asset frozen. They only have frozen $300 million" in cash through a U.S. court in New York. As for the case in Britain, PDVSA doesn't have "any assets in that jurisdiction that even come close to those sums" of $12 billion (8.3 billion euros), Ramirez said.

Ramirez called it a "transitory measure" while the state company, known as PDVSA, presents its case in New York and London. Exxon Mobil is also taking its dispute to international arbitration, which Venezuela has agreed to.

But Ramirez, who is PDVSA's president, said Exxon Mobil "hasn't respected the terms of the arbitration" and said Exxon Mobil's claims in the Venezuela nationalization dispute "don't even come close to half the sum of $12 billion claimed by them."

Exxon Mobil spokeswoman Margaret Ross said the company had no comment on Ramirez's statements.
Ramirez said the court cases "don't have any affect on our cash flow, don't affect our operational situation at all."

Ramirez said Exxon Mobil sued in New York, London and the Netherlands to dispute the terms under Chavez's nationalization last year of four heavy oil projects in the Orinoco River basin, one of the world's richest oil deposits.

"We don't have any decision by any court that's definitive," Ramirez said. "We have a preventative measure in a court in New York that we have a right to respond to, and we are going to."
He accused the Irving, Texas-based oil major of employing "judicial terrorism" and trying to generate "financial nervousness" around PDVSA.

According to documents filed last month in the U.S. District Court in Manhattan, Exxon Mobil has secured an "order of attachment" on about $300 million (207 million euros) in cash held by PDVSA. A hearing to confirm the order is scheduled in New York for Feb. 13.

In a Jan. 24 "freezing injunction" by a British High Court, the court said that "until the return date or further order from the court," PDVSA "must not remove from England or Wales any of its assets which are in England or Wales up to the value of $12 billion (8.3 billion euros)."

The court also said that if PDVSA disobeys the order, it could be held in contempt of court and be fined or have assets seized.

The credit rating agency Fitch Ratings said the British court order would "have a minimum impact on the company's day-to-day operations, as well as its near-term credit quality and financial flexibility." The agency noted that most of PDVSA's assets are located in Venezuela and the United States, where the company has refineries.

But Fitch Ratings also noted that the outcome of the arbitration process with Exxon Mobil remains uncertain and that "a negative outcome of the arbitration could pressure the credit profile of PDVSA."
Other major oil companies including U.S.-based Chevron Corp., France's Total, Britain's BP PLC, and Norway's StatoilHydro ASA have negotiated deals with Venezuela to continue on as minority partners in the Orinoco oil project.

ConocoPhillips and Exxon Mobil, however, balked at the tougher terms and have been in compensation talks with PDVSA.

Ramirez said Venezuelan officials have had "very important meetings" with ConocoPhillips Chairman Jim Mulva and have made progress toward an agreement. "I think we're on a path to achieving it," Ramirez said.

As for the dispute with Exxon Mobil, Ramirez said "we're going to value fairly what would be its compensation, or not if that be the case."