Mumbai: A London court today lifted an injunction against Venezuela's state oil company, Petroleos de Venezuela SA (PDVSA), that froze $12 billion of Venezuelan assets of oil major Exxon Mobil. (See:  Exxon Mobil accused of judicial terrorism as it wins court verdict for freezing $12 billion of Venezuelan assets)

The court dissolved the injunction as the dispute was not connected to the UK Exxon.

Exxon Mobil, the world's largest private sector oil company by market cap, is battling in arbitration to win compensation for an oil field President Hugo Chavez's government seized last year.

''The injunction granted against the defendant, Petroleos de Venezuela, should be discharged,'' Justice Paul Walker ruled.

The judge said he would explain the ruling on Thursday.

Exxon must pay 380,000 pounds ($767,000) of PDVSA's legal fees within 21 days, said Gordon Pollock, a lawyer for PDVSA. He said his client would also seek compensation for damages suffered because of the freeze.

Exxon said it won't appeal the ruling.

Courts in the UK, the US, the Netherlands and the Netherlands Antilles had issued orders in December and January barring PDVSA from shifting or liquidating assets such as bank accounts, refineries and storage terminals.

The freeze hit PDVSA's $1 billion refinery refinancing plans and hampered plans to tap new fields.

The freeze also hit the value of Venezuelan government bonds and an enraged Chavez had even threatened to cut off oil supplies to the US.

PDVSA is seeking to raise $70 billion for expansion aimed at doubling crude output in the next four years.

Exxon also had secured asset freezes worth over $12 billion in the Netherlands and Dutch Antilles, which may now be challenged.

Asset freezes remain in place in the US and two other countries, Exxon said, which is pursuing claims against Venezuela through the International Chamber of Commerce in New York and the World Bank's International Centre for Settlement of Investment Disputes in Washington.

If either panel awards compensation, Exxon may have to return to local courts to enforce the awards. And, in case Venezuela fails to comply, then Exxon would have to move courts where the assets are.

Exxon said it lost 425 million barrels of proved reserves when Chavez last year ordered PDVSA to seize control of four heavy-oil ventures operated by foreign companies, including Exxon's Cerro Negro project.

The dispute stems from a 1997 agreement between Mobil Corp. and PDVSA to explore for extra-heavy crude in the Orinoco oil belt. Exxon, which later acquired Mobil, claimed PDVSA agreed to indemnify Mobil if it later expropriated Mobil's interests.