Exxon Mobil Corp has won court orders freezing up to $12 billion in Venezuelan assets around the world in its fights for compensation over lost operations 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.
As the Reuters reported, “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.
On Thursday, February 7th, 2008 Exxon-Mobil received court orders in Britain, the Netherlands and the Netherlands Antilles each freezing up to $12 billion in total assets of Venezuela state oil firm PDVSA. Exxon also won a court order from the U.S. District Court for the Southern District of New York in December freezing more than $300 million belonging to PDVSA, pending the outcome of its arbitration.
It’s about time that global conglomerates took rogue tyrants like Hugo Chavez to court and “Hit’em where it hurts,”...in the wallet.
Boy, I sure hope the Leftists in America and Europe don’t come to use this as an excuse as to “Why socialism (ultimately) failed in Venezuela.”
The largest U.S. company sought the asset freeze to guarantee repayment should it win arbitration over the Cerro Negro heavy oil project.
As the Reuters reported, “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.
On Thursday, February 7th, 2008 Exxon-Mobil received court orders in Britain, the Netherlands and the Netherlands Antilles each freezing up to $12 billion in total assets of Venezuela state oil firm PDVSA. Exxon also won a court order from the U.S. District Court for the Southern District of New York in December freezing more than $300 million belonging to PDVSA, pending the outcome of its arbitration.
It’s about time that global conglomerates took rogue tyrants like Hugo Chavez to court and “Hit’em where it hurts,”...in the wallet.
Boy, I sure hope the Leftists in America and Europe don’t come to use this as an excuse as to “Why socialism (ultimately) failed in Venezuela.”
6 comments:
No, you dumbass, exxon has not frozen 12 billion in PDVSA assets. Cnn has it wrong. That would be illegal by international law. They have frozen the joint project accounts that were related to the joint venture between PDVSA and them in cerro negro. What exxon actually froze, was its own accounts, in an attempt to place bargaining power in court. Those accounts were joint accounts, by which only 300 million was actual PDVSA money, of which that money was not active (related to operations of PDVSA). The purpose of this is political, and to raise the bar in court for bargaining power. Venezuela has offered 4, they are claiming 12, which is pure fantasy, so, they put 12 in order to bargain 6....That's their real intention, but its not financial in nature, its political. They want to send the message that countries should not change contracts. Chavez in turn sends the message that international companies should not bully sovereing nation's finances.
They will reach a midpoint. In fact, I don't think this is a competition, exxon is clearly disenfranchised here and every single other oil company watching this has admitted exxon made a mistake. They are in the wrong for bullying a soverign nation. Exxon beleives that they can invest somewhere, and not take a risk. They took a risk, and they lost, they should not be sour about it. Yes, they could have made many billions of dollars on the oil price surge that has happened this decade in venezuela, but they didn't. Exxon should stop being a sour loser and just realize that when you take a risk, there is the possibility of downside. PDVSA offered them the value of the project, plus some speculative profits. But Exxon has been the only one to insist that the speculative profits are higher. Many oil companies have conceded that Exxon has taken the wrong road. They will get a few billions and their political message across. But they will lose future contracts, profits, and find a new found hostility, caution and resistance from all OPEC nations.
let me put it in a way you can understand:
if you want an arguement why international companies should not take countries to court, take a look at the United States.
every chinese company could decide its fancy to freeze assets of the federal reserve because they are getting paid in weakened dollars on their treasury bonds, the biggest default in history. The chinese goverment could do the same, since they lost money as well, and claim compensation by appropriating citigroup, morgan stanley and various other companies. Not fair? ah, but that's why its illegal by international law for companies or a country to freeze another's sovereign nation's assets.
How could exxon accomplish this? the answer = it didn't. It simply froze its own joint venture accounts, which is its own money basically, to claim in court a higher price than the compensatory award given to them. PDVSA, just to give you a perspective, could have abolished those accounts and not given them anything. Exxon then, would have unfortunately not been able to do absolutely nothing.
However, PDVSA, didn't do this. They wanted to work with foreign companies. They offered them a concession worth the value of the project plus speculative projects and jount partnership. That's why conoco phillips has accepted the terms of PDVSA. Why every single company has accepted. But Exxon? no, they used the joint venture accounts, supplied in generosity by PDVSA, to claim attachment in court, and pettily put a high cap in order to bargain slightly higher than the concession. Why? if Exxon has made 40 billion in profits this year? Yea, that's right, its not financial. Its political, they want to send the message to not change contracts.
This has turned out to be a detriment to Exxon, whith very lucrative projects now going to Connoco.
absolutley anything*
Exxon has learned that no matter how big their court order, they will not be able to make the billions and billions of dollars that Venezuela made on the oil price surge.
I don't like to rub things in people's faces, I concider that impolite. But if you want to put it mildly. Its a little bit more like exxon 0 vs venezuela 20. And now exxon wants 5 to look like it didn't get completely raped. But Venezuela only wants to give it 1. That's a little bit more like it.
exxon is a sad, petty and sour loser.
"What exxon actually froze, was its own accounts (BH)
This must be my lucky day, I get to spank Barely's ass in TWO places....each "cheek" so to speak, here and at CN. WhooooHoooo!!!
Wrong again Barely!
According to every news source and Venezuela's Energy Minister himself, they froze Venezuelan assets and rightly so, for compensation for Venezuela's "nationalizing" (stealing) Exxon-Mobil's property.
"Exxon Mobil has won a British court order freezing up to $12 billion of worldwide assets belonging to the Venezuelan national oil company, Petroleos de Venezuela, in a dispute over President Hugo Chavez's efforts to seize control of oil ventures in his country."
"Exxon Mobil said yesterday that it also obtained court orders freezing assets in the Netherlands and the Netherlands Antilles, as well as a U.S. court order in the Southern District of New York attaching $300 million in funds belonging to Cerro Negro, a joint venture of Exxon and the state oil company, commonly known as PDVSA."
http://www.washingtonpost.com/wp-dyn/content/article/2008/02/07/AR2008020703802_pf.html
"Venezuela’s Energy Minister, Rafael Ramirez, characterised a series of court orders obtained by Exxon Mobil Corp. in Britain, the Netherlands, and the Dutch Antilles, freezing up to US$12 billion in assets of Venezuelan state oil firm PDVSA, as "judicial terrorism" in a statement today.
The injunctions were solicited by Exxon in anticipation of an arbitration ruling by the International Centre for Settlement of Investment Disputes over a compensation claim."
http://www.greenleft.org.au/2008/739/38264
"every chinese company could decide its fancy to freeze assets of the federal reserve because they are getting paid in weakened dollars on their treasury bonds, the biggest default in history." (BH)
WoW! Wrong yet again. Neither you, I, nor any sovereign nation can sue for losses incurred "in good faith (ie gambling losses, stock losses, etc.).
You CAN'T sue for gambling losses even in "illegal games," as those contracts are not recognized in any court.
Same with stock losses, the bar is very high - the Plaintiff must prove that their losses were due to a "deliberate scam," or "actionable malfeasance" on the part of the broker, which is (thankfully) VERY hard to do.
The U.S. floated over 60% of its sub-prime mortgage debt abroad in seemingly unrelated vehicles, leaving countries like England (hit hard) and China holding the bag.
Again, there's no apparent "scam" there. It would seem that U.S. banks and brokerages acted "in good faith" and those countries are all responsible for the "investments" they made, just as a loser in the stock market is almost always responsible for his/her own losses.
You make the bet, you pay the price.
"That's why conoco phillips has accepted the terms of PDVSA (BH)
WoW! I mean, this is TOO GOOD!
Wrong yet again Barely!
"ConocoPhillips pulled out of its Venezuelan oil ventures in June and took a $4.5 billion write-off after failing to agree on new contract terms with Chavez's government.
http://www.washingtonpost.com/wp-dyn/content/article/2008/02/07/AR2008020703802_pf.html
Barely, you're a diehard socialist who hates the world's greatest prosperity engine (Capitalism) and reviles wonderful global conglomerates, like Exxon-Mobil, who produce tens of thousands of jobs, are on the forefront of developping new technologies, for both new/alternative fuels and for getting more oil from previously unusable sources.
Seriously, we all owe Exxon-Mobil, BP-Amocco, Chevron, etc., a great deal of gratitude.
They're the ones keeping energy flowing at market prices.
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