CARACAS, VENEZUELA — Exxon Mobil Corp. won a round in its bitter fight against Venezuela's state oil company Thursday as courts in several countries said they would freeze $12 billion in international assets held by Petroleos de Venezuela.
Last year, Venezuelan President Hugo Chavez nationalized a heavy oil field in eastern Venezuela, and Exxon Mobil has been seeking to recover the value of its investment in the site ever since. Exxon Mobil, as well as ConocoPhillips, abandoned projects in the country rather than agree to Chavez's demands to cede majority ownership to Petroleos de Venezuela, known as PDVSA.
Irving, Texas-based Exxon Mobil said Thursday that U.S., British and Dutch courts had approved its request to block the Venezuelan oil giant from "disposing of its assets worldwide valued at $12 billion." The action comes amid reports that the oil company that is Chavez's chief source of money is short of cash and could be looking to sell assets.
News emerged this week that Petroleos had to renegotiate a $1.1-billion loan arranged by the French bank BNP Paribas that was due at the end of 2007. Analysts say the oil company may be in a cash crunch because of rising overhead and declining production. Petroleos officials did not respond to a request for comment Thursday.
Despite historically high oil prices in recent months, Petroleos is feeling the effects of an expanded payroll, mounting debt, subsidized gasoline and costly government social programs that the state oil giant's revenue funds, said Gustavo Garcia, an economist at the institute of superior administrative studies in Caracas, Venezuela's capital.
"This problem makes me conclude that PDVSA not only needs high prices, but rising prices," Garcia said. He estimates Venezuela's oil production has slipped to about 2.45 million barrels a day, down from as high as 3.4 million in 2002. With about 1.1 million barrels in daily exports to the United States, Venezuela is the fourth-largest foreign energy supplier behind Canada, Saudi Arabia and Mexico.
Exxon Mobil's announcement Thursday caused Petroleos bond prices to tumble. Yields on some issues rose to 9.5%, reflecting investor fears about the company's ability to stay current on $16 billion in outstanding debt.
Chavez has used revenue from Petroleos to fund an array of health, education and discount food programs in an effort to redistribute the nation's oil wealth to the poor. At the same time, he has asserted Venezuelan "sovereignty" by taking control of the many oil fields that once were majority-owned and operated by foreign oil companies.
