Feb. 8 (Bloomberg) -- Venezuelan Energy and Oil Minister Rafael Ramirez vowed to fight Exxon Mobil Corp.'s effort to freeze $12 billion of the state oil company's foreign assets, calling the move ``judicial terrorism.''

Exxon won court orders in the U.S., U.K., the Netherlands and the Caribbean freezing assets of Petroleos de Venezuela SA, or PDVSA, after Venezuela seized Exxon oil projects in the country. Ramirez, who is also the head of PDVSA, said the company is ready to fight what could be a five-year battle.

``If they think that with this they will get us to backtrack on our nationalization policies, well, gentleman from Exxon Mobil, you are dead wrong again,'' Ramirez told reporters today in Caracas.

Exxon is trying to ``scratch a figure into the negotiating table'' to affect talks about compensation for assets that Venezuela took in 2007, he said. Venezuela took over four operations that pump heavy oil and convert it to lighter oil for export, including Cerro Negro, which Exxon owned.

Howard Stahl, a lawyer with Steptoe & Johnson in New York who is representing Exxon, referred requests for comment to the company. Exxon spokeswoman Margaret Ross, who confirmed the freeze orders yesterday, declined to comment.

Cash Flow

Petroleos de Venezuela won't face cash flow problems as a result of the court order, Ramirez said, promising the company will continue to deliver oil to its customers. Venezuela supplies about 1.8 million barrels a day of oil and refined products to the U.S., either directly or through refineries in the Netherlands Antilles and U.S. Virgin Islands.

The only asset that has been frozen is a New York account with about $300 million, he said. Exxon says it won a worldwide freeze from a U.K. high court for a value of up to $12 billion.

The yield on PDVSA's 5.25 percent bond due in April 2017 rose 17 basis points, or 0.17 percentage point, to 10.90 percent at 4:45 p.m. New York time, according to composite data compiled by Bloomberg. The yield rose as much as 1.3 percentage points to 11.95 percent earlier today, its biggest jump since trading began last April. The price dropped 0.75 cent to 67.75 cents on the dollar.

Borrowing Outlook

PDVSA's lenders aren't worried about the court decisions, Ramirez said. A syndicate of 10 banks renewed a $500 million line of credit a week ago, Ramirez said. After Petroleos de Venezuela sent them copies of the orders ``they discounted that this would affect our financial strength or solvency,'' he said.

The court's orders will ``have a minimum impact on the company's day to day operations, as well as its near term credit quality and financial flexibility,'' Fitch Ratings analyst Gianna Bern said in a note, calling them ``part of the legal wrangling.''

The asset freeze may make it ``virtually impossible'' for PDVSA to borrow money in international markets, said Boris Segura, a Latin America economist at Morgan Stanley in New York.

Ramirez previously said the company planned to reduce its pace of borrowing this year after multiplying its debt almost eightfold to $16 billion in 2007.

The U.K. injunction was granted Jan. 24 without prior notice to the Venezuelan oil company, according to a copy of the ruling. The next hearing on the matter is scheduled for Feb. 22. Joseph Pizzurro of Curtis, Mallet-Prevost, Colt & Mosle LLP, who is representing PDVSA in the New York case, didn't return a call for comment.

Accepting Payment

Until then, PDVSA is barred from removing any assets in England or Wales up to a value of $12 billion. The Venezuelan company was also ordered not to sell or diminish the value of any assets within or outside those countries up to the same value.

Exxon Mobil fell 18 cents to $81.71 in New York Stock Exchange composite trading at 4 p.m. The stock has climbed 8.3 percent in the past 12 months.

Venezuelan President Hugo Chavez, like leaders in Russia, Ecuador and Canada, has sought more income from natural resources. Exxon has taken the hardest line pushing back, with its demand for arbitration and an asset freeze.

``We're not surprised by the attitude of Exxon Mobil,'' Ramirez said. ``What's surprising is that a business that boasts around the world of its levels of seriousness and operations would try to drag us down with judicial terrorism.''

Other companies affected by Venezuela's demand for majority stakes in joint venture and operating control of the sites have taken more moderate lines. Total SA and StatoilHydro ASA accepted payments for reduced stakes. Chevron Corp. accepted the loss of operating control at a project where it kept its shares, and BP Plc remained a minority, non-operating stake of another.

While ConocoPhillips also left the country amid disagreements over compensation and control of projects, the company remains in talks and the sides are on their way to a negotiated solution, Ramirez said.

To contact the reporter on this story: Steven Bodzin in Caracas at sbodzin@bloomberg.net; Matthew Walter in Caracas at mwalter4@bloomberg.net

Last Updated: February 8, 2008 17:00 EST