CARACAS/NEW YORK, Feb. 8 (Xinhua) -- The battle between Venezuela and U.S. company Exxon Mobil on contract disputes was incandesced on Friday and triggered oil market concerns.
Courts in Britain, the Netherlands and the United States agreed to freeze assets worthy of some 12 billion U.S. dollars owned by Venezuelan state oil company Petroleos de Venezuela SA (PDVSA), announced Exxon on Friday.
Exxon, the world's largest oil company, has fought for compensation for a project loss in Venezuela's nationalization drive of its energy sector.
The orders guarantee Exxon's payment should it win arbitration over Venezuela's nationalization of the Cerro Negro heavy oil project.
VENEZUELA VOWS TO FIGHT BACK
Venezuelan Energy and Oil Minister Rafael Ramirez, who is also head of the PDVSA, vowed to fight back, calling the ruling "judicial terrorism."
"If they think that with this (ruling) they will get us to backtrack on our nationalization policies, well, gentleman from Exxon Mobil, you are deadly wrong again," Ramirez told reporters in Venezuelan capital on Friday.
"We are not surprised by the attitude of Exxon Mobil," he said."What's surprising is that a business that boasts around the worldof its levels of seriousness and operations would try to drag us down with judicial terrorism."
Venezuela planned to make a legal response to seek a reversal of the rulings, he said.
In June last year, Venezuela passed a law, under which multinational companies should give at least 60 percent of the capital in their Venezuelan operations to the PDVSA.
Such major oil companies in the world including France's Total, Britain's BP PLC and Norway's Statoihydro ASA basically agreed and have negotiated deals with Venezuela to continue as minority partners in the Venezuela's oil project.
Exxon and ConocoPhillips, however, refused and withdrew from Venezuela. They balked at the tougher terms and have been in compensation talks with the PDVSA.
Exxon is also taking the dispute to international arbitration.
VENEZUELA DENIES IMPACT ON CASH FLOW, OIL PRODUCTION
The Exxon announcement came at a time when the Venezuelan government is reportedly in need of cash to fund President Hugo Chavez's social programs.
U.S. daily Los Angeles Times reported that the PDVSA renegotiated a loan of some 1.1 billion dollars from the French Bank BNP Paribas recently.
However, Ramirez said the court orders will not result in any cash flow problems for either Venezuela or the PDVSA.
PDVSA lenders are not worried about the court decisions, Ramirez said.
A syndicate of 10 banks renewed a credit of 500 million dollarsfor the PDVSA a week ago, said the minister, noting that the banks,after the PDVSA sent them copies of the court orders, "discounted that this would affect our financial strength or solvency."
He also said the court orders will not affect the routine oil operation of Venezuela, one of the world's major oil producers.
Citgo Petroleum Corp., the PDVSA's U.S. refining and marketing arm, issued a statement late Friday, saying the court orders won by Exxon will not affect Citgo's operations.
"In the meantime, to avoid any confusion, none of the orders obtained by Exxon Mobil relate to Citgo and none have any impact whatsoever on Citgo's business," said the company.
"Citgo understands that the PDVSA is confident that it will prevail in the legal battle with Exxon Mobil and will take all steps necessary to defend itself against the actions taken, and any future actions Exxon Mobil may take," it said.
OIL PRICES JUMP OVER SUPPLY CONCERNS
The Exxon-Venezuela dispute has aroused markets concerns that world oil supply may be destabilized.
Prices of light sweet crude for March delivery rose 4 percent, its biggest gains in two months, to settle at 91.77 dollars per barrel at New York Mercantile Exchange on Friday.
In London, Brent North Sea crude for March delivery also saw an up of 3.43 dollars and settled at 91.94 dollars.
