Exxon Mobil Corp's no-holds-barred legal fight against Venezuela may force President Hugo Chavez to settle the dispute over assets that the South American leader seized from the giant U.S. oil company last year.

Exxon won temporary court orders in Britain, the Netherlands and the Caribbean freezing assets worth up to $12 billion and another order in New York locking up $315 million in funds controlled by state-run oil company PDVSA in a U.S. bank.

A U.S. court will hear arguments regarding its injunction at a hearing scheduled for next Wednesday in New York, and a London court will hold a hearing on February 22.

The rulings prevent Venezuela from selling many of its assets and could damage its ability to conduct international business, since its business partners might worry they could get dragged into the dispute, legal experts and lawyers said.

With Venezuela's ability now to run a major business through financial centers in New York and London in question, Chavez may be forced to take a softer stance with the largest U.S. oil company.

It's a tremendous comfort, a security blanket, for Exxon. It also gives Venezuela an incentive to get this over with, said Anthony Sabino, professor of law at St. John University's Tobin College of Business.

The aggressive legal moves by Exxon are the latest salvo in the battle between oil companies and Venezuela, which last June seized control of the oil development projects there, forcing the companies to sell it majority stakes or leave the country.

Total, Chevron Corp, Statoil and BP Plc agreed to sell PDVSA controlling stakes in projects and remain in Venezuela as minority partners, while Exxon and U.S. peer ConocoPhillips refused, prompting Venezuela to expropriate their holdings.

ConocoPhillips has also initiated arbitration against PDVSA but has not sought to have Venezuelan assets locked up.

EARLY VICTORY

At least for now, Exxon appears to have convinced the courts that it has a strong chance of prevailing in the international arbitration it has lodged against PDVSA and that Venezuela may try to evade any financial payments.

It's not that often that you can show you can win on the merits or that the defendant will remove the assets from states where they can be seized, said William Knull, a partner at Mayer Brown in Houston and expert in international arbitration.

The public statements of Venezuela are exhibit A, he added, referring to Chavez's sharp criticism of the oil majors and the U.S. government.

But Chavez, who has regularly railed against the United States and the oil companies that were developing the OPEC state's vast heavy oil reserves, has never been one to back down from a confrontation.

On Thursday, Venezuelan Oil Minister Rafael Ramirez accused Exxon of using legal terrorism in the dispute and said PDVSA would win reversals of the court orders.

Such acrimony could affect the arbitration, and at least one expert doubted that Exxon would benefit from the move in arbitration, a process that regularly runs several years before resolutions are issued.

If anything, it could slow down the arbitration, said Rodman Bundy, a partner at law firm Eversheds LLP in Paris.

At minimum, Exxon's victories winning the injunctions have been an embarrassment for Chavez, Sabino said, and show that in an increasingly global economy, companies that believe they have been wronged have legal recourse.

It's a wake-up call to Chavez, said Sabino. If he wants to play tin-pot dictator, this is the way to deal with him.

While Exxon may prevail in the case, the escalating dispute could damage the company's chances of getting future development deals in the country that holds the world's seventh largest proved reserves of oil, even as Exxon struggles to get access to new fields.

If you get into an acrimonious litigation with a state, you may get a short-term benefit; but in the longer term, it might not be in your interest, Bundy said.