UK judge cancels order to freeze PdVSA assets in ruling against ExxonMobil

LONDON: In a ruling against ExxonMobil Corp., a British judge on Tuesday canceled an order to freeze US$12 billion (€7.6 billion) of assets belonging to Petroleos de Venezuela SA, or PdVSA.

Judge Paul Walker said he would make the reasons for his judgment public Thursday.

During the court case, Walker signaled he agreed that PdVSA has no connection to England — a key argument in PdVSA's defense.

ExxonMobil decided to go to international arbitration with PdVSA last year, after Venezuelan President Hugo Chavez nationalized the Cerro Negro heavy oil joint venture.

ExxonMobil subsequently secured court orders in Britain, among other countries, to freeze PdVSA's international assets, saying that is necessary to ensure it will get paid for the loss of the project and future revenues if an international court rules in its favor.

But PdVSA argued that the case doesn't fall under British jurisdiction since PdVSA isn't an English company and has no assets, businesses or bank accounts in Britain.

During the hearing, which took place Feb. 29 to March 6, the judge questioned assertions by ExxonMobil's lawyers that PdVSA may have English bank accounts and questioned ExxonMobil for referring to past cases relating to companies with assets in England.

The judge also asked lawyers representing the U.S. oil company why they were complaining about PdVSA potentially moving assets elsewhere, suggesting that it didn't matter where PdVSA has its assets, so long as it had US$12 billion in assets.

Following the judgment, ExxonMobil's lead lawyer, Catherine Otton-Goulder, declined to comment on the possibility of the U.S. oil company appealing the judge's decision.