Venezuela wins against Exxon/Mobil Corporation

British Judge Rules Against Exxon Mobil

Tues. March 18, 2008

CARACAS, Venezuela (AP) - A British judge ruled against Exxon Mobil Corp. on Tuesday, tossing out an order to freeze $12 billion in assets belonging to Venezuela's state oil company in a case that stemmed from the nationalization of an oil project last year.

Judge Paul Walker said he would make public the reasons for his judgment on Thursday. During the court case, Walker signaled that he agreed that Petroleos de Venezuela SA, or PDVSA, has no connection to England -- a key argument in its defense.

'Today we have a firm decision 100 percent in our favor,' Oil Minister Rafael Ramirez told state television. 'We've defeated Exxon Mobil (nyse: XOM - news - people ).'Exxon Mobil decided to go to international arbitration with PDVSA last year, after Venezuelan President Hugo Chavez nationalized a heavy oil project in the Orinoco River basin.

The company subsequently secured court orders in Britain, among other countries, to freeze PDVSA's international assets, saying it needed to ensure that it would get paid for the loss of the project and future revenues if an international court ruled in its favor.

PDVSA argued that the case didn't fall under British jurisdiction since it isn't a British company and has no assets, businesses or bank accounts there.

Exxon Mobil spokesman Alan Jeffers said the company has no plans to appeal the ruling. Jeffers said the judge based his decision on jurisdictional issues but didn't question Exxon Mobil's broader case.

'The important thing, from our perspective, is the court did not question the merits of our underlying claim,' he said.

Jeffers said Exxon Mobil took the action to prevent PDVSA from disposing of assets that might be used to settle future claims. He said court rulings in the Netherlands and New York to seize Venezuelan assets in exchange for nationalized oil fields remain in place.

Venezuela, meanwhile, is now considering suing Exxon Mobil, Ramirez said. 'Exxon Mobil is going to have to answer now for the damage that has been caused to our company, to our country,' he said.Ramirez said Irving, Texas-based Exxon Mobil has been 'very arrogant,' while other companies including Chevron (nyse: CVX - news - people ) Corp., Total SA, BP (nyse: BP - news - people ) PLC and StatoilHydro ASA have negotiated deals to continue as minority partners in the nationalized projects.

'Exxon is isolated in its abusive position,' Ramirez said.