Exxon Gets $242 Million by Delaying Venezuela Notice (Update1)

[Joanne98]

Source: Bloomberg

Feb. 13 (Bloomberg) -- Exxon Mobil Corp. waited 24 hours to inform Venezuela's state oil company of a court order freezing a New York bank account, a tactic that netted $242 million.

The world's biggest oil company postponed serving the order to block the account until Venezuela freed up the money on Dec. 28, according to a Jan. 24 federal court filing in New York. Ninety minutes after Exxon Mobil received its wire transfer, the company notified Venezuela of the Manhattan judge's ruling that suspended the account.

The New York court order awarded a day earlier was one of four decrees Exxon Mobil obtained in the past seven weeks that locked up more than $12 billion of assets held by Petroleos de Venezuela SA. Venezuela's state oil company responded yesterday by cutting off sales of crude and refined fuels to Exxon Mobil.

Exxon Mobil's ``conduct is a classic example of unclean hands,'' Joseph Pizzurro, a lawyer with Curtis, Mallet-Prevost, Colt & Mosle LLP in New York who represents Venezuela, said in the Jan. 24 filing. ``Not only is it a breach of contract, it is bad faith, plain and simple.''



Read more: http://www.bloomberg.com/apps/news?pid=20601086&sid=aWcJWxscwnrc&refer=news

[ChairmanAgnostic]

1. well, duh. It is EXXON. explains everything.

[RUMMYisFROSTED]

2. Funny how the judge's name is missing.

But, hey!, he/she/it is from Manhattan!

Horseshit.

[northzax]

3. wait, how did they 'make' money off this?

PDVSA owed ExxonMobil $242m in profits from the Cerro Negro facility, right? And they paid them. is PDVSA arguing that they would have refused to pay ExxonMobil the money they obviously owed them (since they already PAID them) if notice was served?

Mr. Pizzurro has some interesting explaining to do (like, for instance, why they didn't contest the case earlier, when service was originally made on the 4th of December?)

seriously though, this makes it seem like ExxonMobil stole money from PDVSA, which simply isn't true. If you were ExxonMobil, would you have served a freeze on this account before being paid?

[Robbien]

7. They got a court order which froze the account.

So as of the time of the court order, no money was to leave Venezuela's account.

But Exxon waited.

They got their money.

Then they notified the bank that oh yeah, you were supposed to freeze the accounts YESTERDAY. Suckah!

[northzax]

8. not what happened

they failed to notify PDVSA, not the bank. and such an order goes into effect when it is served, not when it is issued. If the money had left the country, instead of going to Exxon, they'be be SOL.

court orders like this are in effect when they are served. not when they are issued.

[Robbien]

11. Sure

Exxon didn't care that all other vendors of PDVSA are gypped out of their rightful payments, they just sat on the freeze and waited til they got theirs and screw everyone else. If there was to be a freeze, then Exxon's payment should have been frozen along with all the others.

If Exxon gets to get paid, then all the other vendors should have gotten paid.

Sorry, I don't buy your unwavering defense of Exxon just because Exxon is going against a country you dislike.

[northzax]

12. all the other vendors?

PDVSA has ten billion dollars in assets in the US. this freeze affected $300million. that's a whopping 3%. if having $300m frozen is causing PDVSA to have trouble paying vendors in the US, then they have some serious, serious problems.

[Robbien]

15. Yes, other vendors

Read the article.

Your dislike of Venezuela clouds your vision.

[northzax]

16. so the press release from pdvsa yesterday

saying that their us operations were not affected in any way by this action was misleading? Which one do we believe?

[Robbien]

17. What we know for sure

is that any article which puts Venezuela in a bad light gets your support. Here you even have Exxon's back. Exxon, the company which brought home $4 Billion dollars last quarter off the exorbitant gas pump prices, is fighting to take oil profits away from the Venezuelan people so you support Exxon.

:eyes:

[Judi Lynn]

18. It's so odd seeing "democrats" root for the multinationals against the populations they are

plundering, isn't it?

Apparently some "Democrats" have never been aware that Democrats have ALWAYS represented the working man and woman, NOT those who exploit them.

All it takes is a few minutes with a history book, or a search engine.

[Robbien]

19. Sure does make one wonder if those "Democrats"

got lost when seeking their way to the wingnut side of the internet and mistakenly turned left instead of right.

"Democrats" supporting Exxon's grab of the Venezuelan citizen's profits? What's next? "Democrats" supporting sending death squads to Latin America?

[northzax]

21. ok, I'll bite

please list for me the number of heavy crude upgrading facilities built by pdvsa over the past decade. Since exxon is taking the people's profit, from where?

Also, what percentage of cerro Negro was owned by exxonmobil? What percentage of the financing was provided by exxonmobil? How much profit is currently being made by pdvsa? How much profit was being made without the facility? Please be so kind as to demonstrate your extensive knowledge of the situation here. Thanks.

[Robbien]

23. Not biting back

Go play Poke the Progressive somewhere else.

[northzax]

27. well, the court upheld the US freeze yesterday

when does Hugo shut off the spigot? he WAS serious, wasn't he?

[northzax]

20. not true

any article which pokes holes in the aura of Hugo Chavez who is running Venezuela into the ground gets my support. And yes, international law almost always gets my support. The uncompensated confiscation of property draws my ire. I make no bones about that. Chavez and pdvsa have bungled this entire thing, from start to finish. I am sorry I find it hard to work up a lot of sympathy when one hundred billion dollar company sues another. Everyone who pays attention knew exxonmobil would appeal the shitty faux-buyout pdvsa offered them. Anyone who has bothered to read any of the actual facts in this case knew exactly what would happen. And i'm sorry if I don't see much of a moral advantage to a firm whose profits are going, among other things, to buy Russian submarines. Sorry, but actual fact is so much on the side of ExxonMobil in this case it is tough to argue against them on anythng but ideology. If pdvsa chooses to do business in the US, they should be beholden to US law, right? If exxonmobil chooses to do business in Venezuela, they should be subject to Venezuelan law, right? So what's the issue you have? By all reasonable accounting, pdvsa told exxonmobil it was going to take over operations at cerro Negro. They offered exxonmobil $500million in unrefined crude for their 40% stake in a six billion dollar company. Exxon said no, and left the country and went to the legally approved arbitrator. Pdvsa refused to show up at arbitration.

And what is really annoying is that this is all showmanship by venezuela's government. Everyone knows what is going to happen, Venezuela has k own it for months. And everyone here is falling for it.

If exxonmobil offends you. Sell your car and buy a bike. Why are you so enamoured with a country whose sole export is killing all of us? If Venezuela grew tobacco, would you be so eager to support it?

Final questions: why has Venezuela's oil export number decreased since 1999? Why is this particular facility offline? Why is Chavez making economic threats against the US, and not the uk or netherlands, which froze many times as many assets? Forty times as much. Any ideas?

[Robbien]

22. No. Very much true

Sell your wingnut talking points somewhere else. Not buying.

All your misleading points can be heard screeched loudly every day on winger hate talk radio. Not even worth debating such blind hatred.

One fact shines through. You mindlessly support Exxon and mindlessly spew hatred at Venezuelan citizens. Perhaps changing the channel will improve your mental health.

[TheMadMonk]

9. I suspect, because it's common practice to freeze payments in both...

directions until disputes like this are resolved. You can bet your bottom dollar that if the situations had been reverses Exxon would most certainly not have made any payment to anyone who'd successfully frozen their accounts.

It might not exactly be theft, but it certainly is a case of making sure they get to keep their cake...

[northzax]

10. oh sure

but it was their freezing of the accounts (which was due to PDVSA's not even showing up at arbitration or responding to any prior service). Had PDVSA simply followed the contractual obligations it laid out for itself, they wouldn't be in this situation.

it is, in fact, hard for me to work up a lot of sympathy for an oil company that, according to themselves, produced over $100billion worth of oil last year. PDVSA is not some babe in the woods (or they shouldn't be. at least) they are a company that does nine figures worth of business, that exported $75BILLION (or so they say) worth of oil last year. that employs 50,000 people.

So they tried to tangle with Exxon, and Exxon fought back, as everyone know Exxon would (they are notorious for that) This is a dispute between to companies that have an insane amount of cashflow, PDVSA shouldn't be getting blindsided by ExxonMobil, if it is being run by professionals.

[AlertLurker]

14. Actually, it's more like $750 million owed.

The $242 million was just a payment, I understand. The $12bn freeze is punitive, period. There WAS existing arbitration from ICSID on this, I remember...

I thought the injunctions were being appealed in NYC today? I haven't heard anything, though.

Looks like a win-win for Exxon, so far. Strange how Total, BP and StatOil all managed to live with minority shares and negotiated...only Exxon and Conoco are refusing to go along with the privatisation plans.

Sooner or later, however, Exxon MUST lose this and wind up paying damages. Their entire case for the injunctions was based on the premise that they were necessary to pressure PDVSA to pay up. This hypothesis kind of goes out the window when you see that PDVSA has already paid them $242 million, however. Once Exxon screws up this deal, they're toast in Venezuela. They're not even going to get a MINORITY (the rest get 41% of profits) stake in the Orinoco Valley.

By then EVERYONE will be paying for it.

[Peace Patriot]

24. "If you were ExxonMobile..."

"If you were ExxonMobil, would you have served a freeze on this account before being paid?" --northzax

You see, here's the thing. They get the "little guy" thinking like he's ExxonMobile--a free-floating country with its own foreign policy, and more wealth than many nations, and more power than the U.S. government, a corporation in fact that, in a sense, owns the U.S. government, and cares as much about its people as George Bush does. So the "little guy"--an ordinary sovereign citizen of the U.S. with modest assets--thinks: "O-o-o, I've got to defend Exxon Mobile's property rights, and their human rights to a fair deal, and a fair hearing in court, cuz then Exxon Mobile will protect me and my little life and property, with lots of "property rights" talk, and they'll side with me and my right to profit from my little enterprise just like theirs--we're in this together, Exxon Mobile and me. And, if I were them, I'd screw the Venezuelan poor, too. Never give a sucker an even break! Take the food right out of those little brown babies' mouths, and then they won't grow up to be illegal immigrants!"

Its gets personal. And the "little guy" starts thinking he is this monstrous, powerful, ungodly wealthy corporation that has thoughts like him, and does things for the reasons he would do them, and is a person and a property owner and just your straight-up American white bigot and ordinary individual greedbag, trying to protect what's his.

Thus Exxon Mobile gets invested, by this sovereign citizen of the U.S., with rights that only said sovereign citizen actually possesses. A corporation is, in truth, nothing. It has no rights at all. It has no right to exist. It has to be chartered by a state of the U.S. and licensed to do business as a consortium. And that charter, and those licenses, can have stringent rules put upon them, to operate in the public interest, and can be pulled by the citizens of a sovereign country any damn time they feel like it--for acting to the detriment of the public good (such as colluding on a heinous corporate oil war, in which 1.2 people innocent people were slaughtered), or for no reason at all.

Exxon Mobile has no sovereignty, no right to exist, no right to live forever accumulating vast wealth and power, no right to profits, no human rights cuz it ain't a human, no right to gas gouge real citizens, no right to hijack the U.S. military for a corporate resource war, no right to dictate our foreign policy, no right to deny Venezuelans their desired cut--60%--for its own oil resources, and no right to commit an act of war against a sovereign people--like freezing their assets--and conspire to topple their democratic government.

Exxon Mobile is a monster with far, far, far too much power. We should be dismantling them--and would be if we still had a democracy. They are BAD DUDES, big time bad dues, mafiosa writ large, kneecapping the poor urchins of Caracas for protection money, and terrorizing the poor here as well.

Exxon Mobile is a global corporate predator mob run by gangsters! We owe them nothing, and neither do the people of Venezuela.

And when they kill the "little guy's" business--by pushing his transportation costs beyond his ability to do business--maybe he'll learn. Exxon Mobile and he have no common interest. They are a gang of utterly ruthless robber barons and killers--an illegitimate entity with no country, and no loyalty to any people. He is a sovereign citizen of the U.S. and, at least in Thomas Jefferson's and James Madison's view, has all the Creator-given rights invested in his person, and Exxon Mobile has NONE. Zilch. Zippo. No rights under the Constitution. No right to personhood. No right to exist.

Therefore, if I were "Exxon Mobile" cannot happen. It posits Exxon Mobile as a single individual, with rights, responsibilities and a conscience. And, no, I wouldn't cheat the Venezuelan poor out of schools and medical care. I would hope that, if I were somehow in a position to add to the biggest profits ever reported by a U.S. corporate gang, I would restrain myself, and act with decency. And that's why I have rights, and Exxon Mobile doesn't. Because I have a conscience; I can be held responsible; I am a PERSON.

[Nihil]

25. Excellent post. (n/t)

:applause:

[Megahurtz]

4. Thieves.

Disgusting.

[northzax]

5. how are they thieves?

please explain.

oh, you meant the intention of PDVSA? they're the ones saying they wouldn't pay their bills.

[Flanker]

26. They are criminals and they will get what is comming to them

They will never ever ever ever work in Venezuela again and that will hurt them big time in the long run, as they lose more and more profitability on declining fields.

From the article


"Exxon Mobil's Venezuelan unit had net income of $362 million on sales of $758 million in 2006, the company's last full year of operations in the country, court documents show. The ratio of profits to sales was quadruple the company's worldwide average."

They just royally screwed themselves bigtime, this quadrupling means these fields are the future of transnationals, Chevron stayed, Conoco even though they left they are on good terms (most likely) will get an opportunity to invest in the future.

Exxon is gone forever, even if there is a change in govt they will be toppled civically if they do business with Exxon again.

[Supersedeas]

6. the filth that lives in fancy suits and Gucci shoes

[MasonJar]

13. One reason that the oil companies were nationalized was that the

US companies were not paying negotiated fees to Venezuela. Exxon is a despicable example of greed and hegemony.

[RantinRavin]

28. Incorrect.

The companies had a choice to either agree to new contracts giving Venezuela 60% control over all operations, or be taken over completely. Exxon refused to agree to the new contract.

[inMD]

29. First time I heard this

This is the first time I've heard this.

Link please.

What I've heard over and over is that the deal Exxon had with Venezuela was horribly in Exxon's favor. Now, if that was true and they only had to pay a pittance, why would they reneg on such a sweetheart deal and risk losing everything.

In response to the article....I'm sure when the courts figure out the $12B in contention, I'm sure they'll take into consideration the $242M that has been paid.