An Early Thaw: Venezuela Beats Freeze in Court, No Appeal to Come

"We have defeated Exxon," said Venezuela's Oil Minister Rafael Ramirez in a Tuesday television address after a U.K. court reversed the decision and lifted a $12 billion freeze on assets in the South American country.

"The injunction granted against the defendant, Petroleos de Venezuela, should be discharged," said Justice Paul Walker of the Royal Courts of Justice, lifting the freeze.

ExxonMobil moved to have the assets frozen in an international court in January when Venezuela chose to exercise its sovereignty and nationalize the oil and gas assets within its borders.

The court's decision is a "100% victory," said Ramirez.

Alan Jeffers, a spokesperson for ExxonMobil, told reporters Tuesday that Exxon has no plans for an appeal following the U.K. judge's ruling. Jeffers added that while Justice Walker's decision came down to jurisdiction, he did not question Exxon's "underlying claim," according to Dow Jones.

The reasons for the judge's ruling will be released Thursday. "I hope to provide a short document with the reasons for my judgment on Thursday," Walker told reporters.

Reports show that PdVSA's attorneys argued in court that ExxonMobil had no right to have the assets frozen in a U.K. court because the U.K. has no jurisdiction over a Venezuelan company.

Attorneys for ExxonMobil came under fire when the judge questioned them as to why they would protest the moving of the assets by Venezuela, saying it shouldn't matter where the assets are located as long as the assets are still there.

ExxonMobil has been ordered by the court to pay damages totaling $765,300 caused by the freezing of the assets and legal expenses. The Texas-based oil giant has 21 days to make the payment, according to reports. Some indications are that the final payment may be higher.

ExxonMobil has reportedly applied for arbitration over compensation for losses incurred during the asset acquisition. A lawyer for PdVSA told reporters that the arbitration would more than likely commence later this year or in 2009.

ExxonMobil's additional asset freezes in Dutch Antilles and the Netherlands are now in the sights of Venezuela's legal team.

"This is the beginning of the end of the harassment campaign Exxon instigated against Venezuela," Venezuela's Ambassador to Britain told reporters. "We are planning to fight all the way."

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