UK judge may rule on PDVSA asset freeze next week

By Tom Bergin

LONDON (Reuters) - A UK judge may rule next week on whether to lift an order that U.S. oil major Exxon Mobil <XOM.N> secured, freezing $12 billion of assets owned by Venezuelan state oil company PDVSA, a lawyer for PDVSA said on Monday.

The biggest U.S. company by market value is in a dispute with Venezuela over oil fields lost to leftist President Hugo Chavez's nationalization drive.

The UK asset freeze, and similar ones granted in the Netherlands and the Dutch Antilles, were awarded so that Exxon would be able to extract compensation should it win arbitration it has sought over the fields.

John Fordham, head of commercial litigation at law firm Stephenson Harwood, said PDVSA has appealed against the UK court order freezing its assets and that a hearing was scheduled to start at 1400 GMT on Thursday.

The judge could rule as early as Friday but he was more likely to do so next week.

"He has allocated two and a half days to hear the case, so if it runs its course, it will be Thursday afternoon, Friday and Monday," Fordham told Reuters in a telephone interview.

PDVSA is arguing that the UK courts did not have the authority to award the injunction as the case involved U.S. and Venezuelan parties and arbitration which would be held in New York, under the auspices of a unit of the World Bank.

"There is no reason why the English court should have made this order, there is no real connection with England," Fordham said.

Fordham added that as the case had significance beyond this dispute, the judge may delay his ruling for another week or more.

"It is an important case for our freezing order jurisdiction so he might think he needs to give a considered judgment."

Venezuela's oil minister Rafael Ramirez described Exxon's move as "legal terrorism" and said the seized oil project was worth less than $1.2 billion. A U.S.-based lawyer for PDVSA said Exxon had initially asked for only $5 billion compensation.

(Editing by Jason Neely)