Court reverses Exxon freeze on Venezuela assets

By Tom Bergin

LONDON (Reuters) - A British judge on Tuesday lifted a $12 billion (6 billion pound) freeze on Venezuelan assets awarded to Exxon Mobil (XOM.N), dealing a blow to the oil giant in its fight with the OPEC nation over President Hugo Chavez's nationalization crusade.

The ruling hands a victory to Chavez in the bare-knuckles dispute between the largest U.S. oil company and one of the world's most oil-rich countries that boosted energy market tensions and helped push oil prices to new records above $112.

"Our people won, our country won, our homeland won," said Energy Minister Rafael Ramirez in a press conference, after earlier describing the decision as a "100 percent" victory for Venezuela. "The judge's decision is a lesson to Exxon Mobil."

Venezuela and Exxon are in international arbitration over the 2007 takeover of an oil project Exxon once ran. The company wants at least $5 billion in compensation, but Venezuela insists the assets are worth less than $1 billion.

Venezuela's sovereign bond prices rallied almost 1.2 point in price on Tuesday's decision, recouping some losses from sell-offs earlier in the year. Exxon Mobil shares closed up 3.12 percent to $88.47 per share on the New York Stock Exchange.

The Texas company won the injunction orders in January after arguing state oil company PDVSA could sell off so many assets that it might be not be able to pay compensation in an eventual ruling over the Cerro Negro heavy oil project.

The judge discarded the measure and ordered Exxon to pay PDVSA's legal costs and compensation for some of the damages caused by the measure.

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