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http://www.newsmax.com/newsfront/exxon_asset_freeze/2008/02/08/71342.html
Venezuela Calls Exxon's Asset Freeze Terrorism
Friday, February 8, 2008
CARACAS -- Venezuela accused Exxon Mobil of legal "terrorism" on Friday
after the giant U.S. oil company won court orders freezing $12 billion of
the South American oil supplier's assets in a dispute at the heart of a
worldwide tussle for control of natural resources.
Venezuela's oil minister Rafael Ramirez downplayed the rulings, reassuring
investors they had little impact on the supplies, operations or cash flow of
the state oil company, PDVSA, which he said has about $100 billion in
assets.
He said the largest American company hoped to destabilize the government of
anti-U.S. President Hugo Chavez by using the legal battle over the
nationalization of an Exxon project to create panic about the OPEC nation's
finances.
Exxon, which last week reported the largest ever profit of a U.S. company,
sought the freeze to guarantee repayment should it win arbitration over
compensation for the project seized in a wave of Chavez takeovers last year.
Exxon "aims to subject us to a situation of judicial terrorism, of legal
terrorism," Ramirez told reporters. "We are not going to back down, we are
going to beat them in this battle."
The escalation of the dispute between the world's largest oil company and
Chavez, a leading proponent of resource nationalism, helped lift oil prices
due to investors' concerns over sales from the No. 4 exporter to the United
States.
Exxon has won court orders in Britain, the Netherlands and the Dutch
Antilles freezing assets of state oil company PDVSA.
The company said U.S. law made it too difficult to go after Venezuela's most
valuable overseas asset -- Citgo, the eighth largest oil refiner in the
United States.
The value of Venezuela's debt fell as investors also worried the rulings
would limit the activities of PDVSA, which is the main source of government
income and has shown signs of cash flow problems as it finances Chavez's
social programs.
But credit ratings agency Fitch dismissed concern over any impact on the
day-to-day operations and credit-worthiness of a company whose assets
include refineries and storage terminals from the Caribbean to the United
States to Europe.
"At the end of the day, as long as they have $12 billion in assets anywhere
in the world, they are in compliance with this court order," Gianna Bern,
senior director at Fitch Ratings Latin America Corporate Finance, said.
EXXON FIGHTS TOUGH
Exxon's move is the boldest challenge yet by an international oil major
against any of governments from Russia to Ecuador that have moved to
increase their control over natural resources as energy and commodity prices
have soared.
It underscored Exxon's reputation for aggressively dealing with foes and its
willingness to wage prolonged legal battles to defend its interests around
the world.
The U.S. government quickly sought to distance itself from Exxon's legal
battle with Chavez.
But Venezuela seized on the case to highlight its accusations that foreign
companies -- supported by the United States -- are against Chavez because he
has increased his control over some of the world's largest oil deposits.
"For a long time we have been denouncing Exxon Mobil as the typical
multinational, U.S. company that has tried to attack oil producing
countries," Ramirez said.
In the next week, Venezuela will make its legal response to seek a reversal
of the rulings, which were temporary and did not affect the operations of
the assets involved, he said, adding their real value was far less than $12
billion.
He scoffed at Exxon's compensation demands as "ridiculous."
With high world oil prices, Chavez has relied on oil sales to pay for
popular food subsidies and school building programs for the majority poor in
his self-styled socialist revolution.
Chavez clashes with Washington over everything from oil prices to democracy
to free trade.
The United States, Venezuela's biggest oil customer, stressed the dispute
was between Venezuela -- and not the Bush administration.
"Has the U.S. government put Exxon up to doing this? ... The answer to that
question was no. They are pursuing their corporate interests in accordance
with their needs," State Department spokesman Tom Casey said.
Venezuela Calls Exxon's Asset Freeze Terrorism
Friday, February 8, 2008
CARACAS -- Venezuela accused Exxon Mobil of legal "terrorism" on Friday
after the giant U.S. oil company won court orders freezing $12 billion of
the South American oil supplier's assets in a dispute at the heart of a
worldwide tussle for control of natural resources.
Venezuela's oil minister Rafael Ramirez downplayed the rulings, reassuring
investors they had little impact on the supplies, operations or cash flow of
the state oil company, PDVSA, which he said has about $100 billion in
assets.
He said the largest American company hoped to destabilize the government of
anti-U.S. President Hugo Chavez by using the legal battle over the
nationalization of an Exxon project to create panic about the OPEC nation's
finances.
Exxon, which last week reported the largest ever profit of a U.S. company,
sought the freeze to guarantee repayment should it win arbitration over
compensation for the project seized in a wave of Chavez takeovers last year.
Exxon "aims to subject us to a situation of judicial terrorism, of legal
terrorism," Ramirez told reporters. "We are not going to back down, we are
going to beat them in this battle."
The escalation of the dispute between the world's largest oil company and
Chavez, a leading proponent of resource nationalism, helped lift oil prices
due to investors' concerns over sales from the No. 4 exporter to the United
States.
Exxon has won court orders in Britain, the Netherlands and the Dutch
Antilles freezing assets of state oil company PDVSA.
The company said U.S. law made it too difficult to go after Venezuela's most
valuable overseas asset -- Citgo, the eighth largest oil refiner in the
United States.
The value of Venezuela's debt fell as investors also worried the rulings
would limit the activities of PDVSA, which is the main source of government
income and has shown signs of cash flow problems as it finances Chavez's
social programs.
But credit ratings agency Fitch dismissed concern over any impact on the
day-to-day operations and credit-worthiness of a company whose assets
include refineries and storage terminals from the Caribbean to the United
States to Europe.
"At the end of the day, as long as they have $12 billion in assets anywhere
in the world, they are in compliance with this court order," Gianna Bern,
senior director at Fitch Ratings Latin America Corporate Finance, said.
EXXON FIGHTS TOUGH
Exxon's move is the boldest challenge yet by an international oil major
against any of governments from Russia to Ecuador that have moved to
increase their control over natural resources as energy and commodity prices
have soared.
It underscored Exxon's reputation for aggressively dealing with foes and its
willingness to wage prolonged legal battles to defend its interests around
the world.
The U.S. government quickly sought to distance itself from Exxon's legal
battle with Chavez.
But Venezuela seized on the case to highlight its accusations that foreign
companies -- supported by the United States -- are against Chavez because he
has increased his control over some of the world's largest oil deposits.
"For a long time we have been denouncing Exxon Mobil as the typical
multinational, U.S. company that has tried to attack oil producing
countries," Ramirez said.
In the next week, Venezuela will make its legal response to seek a reversal
of the rulings, which were temporary and did not affect the operations of
the assets involved, he said, adding their real value was far less than $12
billion.
He scoffed at Exxon's compensation demands as "ridiculous."
With high world oil prices, Chavez has relied on oil sales to pay for
popular food subsidies and school building programs for the majority poor in
his self-styled socialist revolution.
Chavez clashes with Washington over everything from oil prices to democracy
to free trade.
The United States, Venezuela's biggest oil customer, stressed the dispute
was between Venezuela -- and not the Bush administration.
"Has the U.S. government put Exxon up to doing this? ... The answer to that
question was no. They are pursuing their corporate interests in accordance
with their needs," State Department spokesman Tom Casey said.
