Courts Freeze $12 Billion of PDVSA Assets

Courts in Britain, the Netherlands and the United States agreed to freeze $12 billion of Petroleos de Venezuela’s assets, Exxon Mobile Corp. said Friday.

The move, in the wake of a dispute with Exxon, comes at a time when Venezuelan President Hugo Chavez’s government is desperate for cash to fund social programs and cover mounting debt, the Los Angeles Times reported.

The nationalized oil company Petroleos renegotiated a $1.1 billion loan from the French Bank BNP Paribas recently. It had come due at the end of 2007, the report said.

In 2007, Chavez nationalized oil fields in eastern Venezuela, including the Exxon’s Cerro Negro field, which had been producing 115,000 barrels of heavy oil a day.

Exxon had spent billions on production in Venezuela, due to the tar-like quality of the oil. After Chavez nationalize the oil fields, however, Exxon pulled out.

The announcement that the its foreign assets had been frozen caused Petroleos’ value to tumble in the market as investors expressed concern that the company can no longer manage its $16 billion outstanding debt.