News of the big win in the High Court is only just filtering out, and The Slug admits he’s not quite sure what it really means, or what the future ramifications might be.

But state-owned oil companies around the world will be looking closely at the judgement because, believe it or not, their greatest problem is what to do with all their spare loot – and investing outside their own borders has just became a little more risky.

Before addressing the future, let’s look at the present and precisely what happened in London.

According to reports from the High Court, ExxonMobil applied to have assets of the state-owned Petroleos de Venezuela (PDSVA) frozen because it is in dispute over Venezuela’s seizing control of the Cerro Negro heavy-oil field last June.

To say ExxonMobil was somewhat annoyed is an understatement even though Venezuela offered to pay book value for the oilfield.

The Slug will not bother with the intricacies of how assets are treated from an accounting stand-point, simply point out that book value and market value are often completely different matters.

At a guess, ExxonMobil probably feels that it has been short-changed by a few billion dollars.

What to do?

Well, in Venezuela there’s not much point in complaining because the people in government have guns, and apart from that the country is run by a nut case called Hugo Chavez who wants to create the United States of South America, with him as president, naturally – oh, and for life, of course.

If a direct protest is out of the question there’s always the courts – but not, obviously, in Venezuela where Hugo has the legal system under his thumb.

That’s why London was chosen as the place the start the fight, and to score a marvellous little victory.

What happened in the High Court is that ExxonMobil asked for a “freeze” order on certain assets as a precautionary step in a complex legal manoeuvre which includes a separate appeal to the International Chamber of Commerce over the Cerro Negro dispute.

The PDSVA assets are believed to include an oil refinery in Texas, and refining interests in Germany and Finland.

If ExxonMobil wins in the Chamber it wants a bit of leverage to see that it can enforce the decision.

The “freeze” order means that it has the legal backing to extract compensation from Venezuela, either by selling a few refining assets, or by taking possession.

Needless to say Venezuela is now feeling aggrieved, with its oil minister, Rafael Ramirez, referring to the decision as judicial terrorism – an amusing turn of phrase given that his government has been behaving appallingly over the past few years, and indulging in want might even be called “commercial terrorism”.

Name-calling aside we now have a truly fascinating situation in which Venezuela is the cock of its own dung heap, but has discovered that it is actually a rather small dung heap and if it wants to do business in the outside world, or invest outside its borders, then it must run the gauntlet of international law.

Expropriating legally owned assets has been a favourite trick of corrupt regimes for centuries.

But in the modern world where globalisation is the name of the game, this has just become a much more dangerous practise.

Given that oil-rich countries are getting richer by the minute, they have little choice but to invest some of their spare cash overseas.

What ExxonMobil has done is demonstrate that if you are nasty to investors at home there’s an international legal system waiting to be used.