Venezuelan Assets Frozen
In a stinging move against (T)Hugo Chavez's attempt to steal nationalize the investments of foreign companies, Exxon Mobil has won court orders freezing $12 billion in Venezuelan assets pending the outcome of arbitration over the seizures.
NEW YORK (Reuters) - Exxon Mobil Corp (XOM.N) has won court orders freezing up to $12 billion in Venezuelan assets around the world as it fights for compensation for operations lost to President Hugo Chavez's nationalization drive.
The largest U.S. company sought the asset freeze to guarantee repayment should it win arbitration over the Cerro Negro heavy oil project.
The move is the boldest challenge yet by an international oil major against any of the governments around the world that have moved to increase their holds on natural resources as energy and commodity prices have soared.
"To me it sounds like a very aggressive tactic," said Stephen Zamora, professor of international law at the University of Houston Law Center.
"I can't really say that I'm aware this has been used in other investment disputes. They may be trying to get the government to settle."….
…. The news comes as a tough blow to Chavez, who suffered a stinging defeat in a December referendum that would have let him run indefinitely for reelection and enshrine socialism as the OPEC nation's economic system.
PDVSA is already facing growing debt and increasing operational problems that analysts attribute to underinvestment caused by the company's massive contributions to Chavez's social programs.
But the near-term effect of the Exxon legal maneuver on PDVSA's day-to-day operations was not immediately clear.
The South American nation has an extensive overseas refining network, including the Citgo refining and marketing branch in the United States.
Notice that one fact? PDVSA is having greater problems producing oil because they are not taking care of the infrastructure. This is why socialism simply does not work. The money is not simply there for the taking - it has to be produced from something. That requires investment. Instead, the socialist system attempts to grab all that lovely money but fails to recognize that part of that money must be reinvested. Here is a prediction for you. There is going to be a major - and I mean really major - catastrophic failure at a Venezuelan oil production facility. It will not be due to any outside factor, either. It is going to happen because they failed to do some routine maintenance.
Exxon is smart to get those court orders.
World news | Gaius Thursday, 7 February , 2008
By Tom, Thursday, 7 February , 2008 @ 8:22 pm
Ooops…Chavez did it again!!
Idiot…
By chuck, Thursday, 7 February , 2008 @ 9:24 pm
And if there is a major disaster, it will be blamed on sabateurs and wreckers. Venezuela will not be a pretty place to be.
By ted goldman, Friday, 8 February , 2008 @ 10:21 am
What is the CIA doing to bring down Chavez?
Only Sean Penn, and his ilk, would object.
By sam, Friday, 8 February , 2008 @ 3:38 pm
I may be biased since I am an Exxon shareholder, but this is great news.