PDVSA's frozen assets

Petroleos de Venezuela President Rafael Ramirez said ExxonMobil's move to freeze more than $12 billion in assets was "judicial terrorism" typical of multinational oil companies that until recent years were in the habit of trampling resource-producing nations' sovereignty. Terrorist or no, the action by the U.S. energy giant to recoup the cost of the Cerro Negro oil field, nationalized by Venezuelan President Hugo Chavez in June, rippled through the financial world Friday. 

Prices of bonds of the Venezuelan oil company, known by its initials, PDVSA, continued to fall in Friday trading as analysts shone a light on PDVSA's stressed-out financial condition. Although most analysts saw no near-term threat of a default on PDVSA's $16 billion in debt, Goldman Sachs analyst Alberto Ramos told Bloomberg News that U.S., Dutch and British courts' action limiting PDVSA's ability to dispose of foreign assets endangered some bondholders.

The company has cash-flow problems that will be tested by upcoming bond payments, Bloomberg notes. At the same time that pressure is on for PDVSA to raise cash, the court action may make such sales problematic. At a press conference Friday, Ramirez (pictured) said the ExxonMobil court action was a bluff and denied that assets were frozen. PDVSA's most valuable property in the United States undoubtedly is the Citgo gasoline refining and distribution network. Last year, PDVSA sold its interest in one U.S. refinery and is thought to be peddling Citgo.

-- Chris Kraul in Caracas

Photo credit: El Universal