Venezuela oil giant tries end run

CARACAS, VENEZUELA — Venezuela’s state oil company reportedly moved to protect its assets from Exxon Mobil Corp.’s legal reach Monday as experts speculated that the South American energy giant may be suffering a severe cash shortage.

Petroleos de Venezuela, or PDVSA, instructed its traders to deposit oil receipts with UBS bank in Switzerland, the Reuters news agency reported Monday. The move follows Exxon Mobil’s victory last week persuading U.S., British and Dutch courts to freeze PDVSA bank accounts and other assets worth $12 billion. Efforts by The Times to reach PDVSA executives for comment Monday were unsuccessful.


…It is difficult to glean a clear picture of PDVSA’s finances because it discloses limited information to the public. However, the company seems to have the wherewithal to stay current on debts totaling about $16 billion, of which $2.1 billion is due in 2008, said Standard & Poor’s sovereign analyst Richard Francis.

“Exxon Mobil is going to court not because it fears PDVSA can’t pay, but because it fears it won’t pay,” Francis said.

But others Monday painted a darker picture of PDVSA’s financial condition. Guerra said the company was paying Total of France in oil for the value of its nationalized field in the Orinoco region “because it doesn’t have any cash.”

“PDVSA is in a very deep crisis, both in terms of its management and its oil production, which has declined for 10 quarters in a row,” Guerra said. “The Exxon Mobil court action is damaging because it affects the credibility of PDVSA.”

LA Times