After Venezuela’s President Hugo Chavez implemented numerous reforms and among them nationalized assets of international oil companies operating in the South American country Big Oil decided to strike back.

ExxonMobil, the multi-national American corporation and direct descendant of John D. Rockefeller's Standard Oil Company, announced on Feb. 7 that courts in United Kingdom and the United States had granted its requests to freeze more than $12 billion in assets of Venezuela's state oil company, Petroleos de Venezuela (PDVSA).

ExxonMobil, the petroleum company that reported this year the highest profit in the history of non state-owned corporations, is seeking compensation after Venezuela seized two company projects worth several billion dollars.

"The freezing order prohibits PDVSA from disposing of its assets worldwide up to a value of $12 billion," ExxonMobil spokeswoman Margaret Ross.

ExxonMobil "has also obtained attachment orders from courts in the Netherlands and Netherlands Antilles against PDVSA assets in each of these jurisdictions up to $12 billion."

Venezuela’s dollar-denominated bonds recorded the biggest drop in six months on Thursday due to the concerns that the Chavez government could face a prolonged legal battle with ExxonMobil. Such a battle would prevent the government from raising cash through the sale of refineries abroad.

Concerns about the health of the national oil company, Petróleos de Venezuela, have also grown among investors and the latest reports showing the company’s debt increasing while its output declines won’t make thing better.

“This is a big blow against Venezuela. It could set an important precedent for other multinationals threatened by Venezuela’s government,” said Pietro Pitts, an oil analyst who publishes Latin Petroleum, an industry magazine based in Venezuela.

This dispute comes just a few days after Exxon reported a record net profit. The company had earnings of about $40.6 billion, which is 3 per cent higher than the amount earned a year before. The figure was higher than Exxon’s 2006 profit record which had set a record for an American corporation.

The fourth-quarter was Exxon’s most profitable quarter ever with a net income rising 14 percent, to $11.7 billion, or $2.13 a share, from $10.25 billion, or $1.76 a share, in 2006.
The corporation recorded annual sales of $404.5 billion, up 7 percent from 2006.