Exxon Mobil accused of judicial terrorism as it wins court verdict for freezing $12 billion of Venezuelan assets

Our Corporate Bureau
09 February 2008

Mumbai: Oil giant ExxonMobil Corporation has won court orders in the US, UK, the Netherlands and the Caribbean, in its battle over the Venezuelan government's seizure of oil projects, resulting in the freezing of over $12 billion in Venezuelan assets.

ExxonMobil, like several other foreign energy companies, had signed a joint production agreement with Venezuela's state-owned oil company Petroleos de Venezuela SA or PDVSA. But the joint ventures fell off with president Hugo Chavez strengthening government control over the country's resources.

Joint venture participants had either to accept reduced roles and profits or walk off. Exxon Mobil and ConocoPhillips dropped out of the projects, but moved courts in the Caribbeans, US, the UK and the Netherlands.

PDVSA was expected to shift assets to other Latin American countries and China in order to keep them out of reach of an international arbitration commission. Exxon Mobil has a sizeable investment in the projects and shifting of assets would deny it the opportunity to pursue the case.

The UK injunction, granted January 24, is to be heard next on February 22. PDVSA cannot remove assets in England or Wales up to a value of $12 billion until the next hearing and can neither sell nor reduce the value of any assets within or outside these countries up to the same value.

Courts in the Netherlands and the Netherlands Antilles have issued attachment orders favouring Exxon Mobil, freezing up to $12 billion of PDVSA assets in each jurisdiction.