updated 2/7/2008 6:37:03 PM ET 2008-02-07T23:37:03

Exxon Mobil Corp. has secured court orders to freeze more than $12 billion in worldwide assets of Venezuela's state-owned oil company, as it prepares to dispute the nationalization of a multi-billion dollar oil project.

The move limits Petroleos de Venezuela's room to maneuver as it fends off challenges from major Western oil companies over President Hugo Chavez's 2007 decision to nationalize four heavy oil projects in the Orinoco Basin, one of the richest oil deposits in the world.

Exxon and ConocoPhillips opted to walk away from the contracts rather than stay on in a minority role. Both have filed arbitration proceedings with the World Bank seeking compensation and Conoco "continues to discuss an amicable resolution specific to the assets that were expropriated in Venezuela," Conoco spokesman Bill Tanner said.

ExxonMobil has so far been the most aggressive in fighting back. The Irving, Texas-based oil major's legal action essentially seeks to ring-fence Venezuelan assets ahead of any decision by the arbitration panel.

According to documents filed last month in the U.S. District Court in Manhattan, Exxon Mobil has secured an "order of attachment" on about $300 million in cash held by PdVSA. A hearing to confirm the order is scheduled in New York for Feb. 13. Exxon also filed documents with the New York court showing it had secured a freeze on $12 billion on PdVSA's worldwide assets from a U.K. court.

"On Jan. 24, the High Court of England and Wales was satisfied that there is a real risk that PdVSA will dissipate its assets and accordingly entered a Worldwide Freezing Order ex parte," Exxon said in the filing to the New York court. The order prohibits PdVSA from "disposing of its assets worldwide up to a value of $12 billion whether directly or indirectly held."

Further hearings on the $12 billion freeze are scheduled on Feb. 22, according to Exxon's filing.

In a statement, Exxon Mobil spokesperson Margaret Ross confirmed the court filings. She added that the company "has obtained attachment orders from courts in the Netherlands and Netherlands Antilles against PdVSA assets in each of these jurisdictions up to $12 billion." Exxon said the orders are subject to further review by the courts. "We will not comment further on legal proceedings, she said.

In a filing, PdVSA disputed the need for a freeze. In a Jan. 24 response disputing orders of attachment from Dec. 27 and Jan. 8, PdVSA said Exxon Mobil "has failed to sustain its burden of establishing that any arbitration award it obtains may be rendered ineffectual without provisional relief." A PdVSA spokesman declined to comment.

Exxon's move signals an aggressive response to the trend of resource-rich countries flexing their muscle over the large oil majors. Since oil prices began skyrocketing earlier in the decade, oil producing nations have grown bolder in their dealings with publicly traded companies active on their territories by demanding larger stakes in existing projects and raising taxes.

Venezuela will pay two European oil companies that were partners in other Orinoco heavy oil projects less than half the estimated market value of their stakes, according to a copy of the compensation agreement reviewed by Dow Jones Newswires.

That agreement offers an inkling of what ExxonMobil and ConocoPhillips could be expecting as they carry on compensation talks with PdVSA.

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