Exxon wins freeze on $12 billion of Venezuelan assets
- Thread starter ColdBlooded
- Start date
Thursday marked the deadline for ExxonMobil to undo the damage it had done to the international reputation of the Venezuelan state oil company PDVSA by pursuing a $12 billion freeze of PDVSA assets in early February after during international arbitration in a dispute over a nationalized Orinoco Oil Belt project. The order to come clean on false accusations against PDVSA's credibility was part of the decision by British Judge Paul Walker on Tuesday to revoke the asset freeze.
Venezuelan Energy and Petroleum Minister Rafael Ramírez, who is also president of PDVSA, said that Exxon "Repeatedly tried to deceive the judge... one of the allegations was that PDVSA is not a state enterprise... [that it] is broken... that we have brought it to a state of financial precariousness," when in reality PDVSA is "one of the 5 most important companies in the sector on a worldwide level."
Beyond Judge Walker's order that Exxon compensate PDVSA's legal costs, Ramírez and others have indicated that PDVSA will seek compensation for damages such as a sharp drop in bond ratings immediately after the asset freeze.
Venezuelan Ambassador to Guatemala David Paravisini, an engineer and expert on Petroleum policy, claimed Exxon could be obligated to pay over $1 billion in damages to PDVSA, which would cancel out what the Venezuelan company owed Exxon's nationalized stake in the Cerro Negro project. Also, Exxon would have to deal with "grave consequences, not only in terms of international prestige... but in what they will face with their stockholders."
The Orinoco Oil Belt is located in Venezuela's Orinoci river basin. It is estimated that Venezuela has about 250 billion barrels of extra-heavy oil.
Venezuelan Energy and Petroleum Minister Rafael Ramírez, who is also president of PDVSA, said that Exxon "Repeatedly tried to deceive the judge... one of the allegations was that PDVSA is not a state enterprise... [that it] is broken... that we have brought it to a state of financial precariousness," when in reality PDVSA is "one of the 5 most important companies in the sector on a worldwide level."
Beyond Judge Walker's order that Exxon compensate PDVSA's legal costs, Ramírez and others have indicated that PDVSA will seek compensation for damages such as a sharp drop in bond ratings immediately after the asset freeze.
Venezuelan Ambassador to Guatemala David Paravisini, an engineer and expert on Petroleum policy, claimed Exxon could be obligated to pay over $1 billion in damages to PDVSA, which would cancel out what the Venezuelan company owed Exxon's nationalized stake in the Cerro Negro project. Also, Exxon would have to deal with "grave consequences, not only in terms of international prestige... but in what they will face with their stockholders."
The Orinoco Oil Belt is located in Venezuela's Orinoci river basin. It is estimated that Venezuela has about 250 billion barrels of extra-heavy oil.