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In the latest showdown between western oil companies and Venezuela’s populist president, Exxon Mobil is widely seen as the loser, after the Paris-based International Chamber of Commerce (ICC) ruled that the world’s biggest oil company would not be entitled to most of the damages it demanded after its fields were nationalised.

Despite this recent victory, PDVSA is facing some trouble. Under Chavez, the energy giant has undertaken ambitious social spending, running subsidised food distribution programmes and international aid projects as if it were a state unto itself. Critics say oil companies should not be delivering government services. And the money used for "Bolivarian" projects means the corporation has less to invest in developing new reserves; production has dropped from about 3.3m barrels per day in 1998 to about 2.25m in 2011, The Economist reported.

Like many of its South American neighbours, Venezuela has drastically reduced poverty in the past decade; the Bolivarian Republic’s poverty rate fell from 48.6 per cent in 2002 to 27.8 per cent in 2010, according to the UN Commission for Latin America's 2011 report. Inequality also declined sharply. This progress is linked to tough negotiations with foreign oil companies, so the state can have more resources to invest in local communities, Chavez’s supporters contend.

The case stems from oil pollution in the Ecuadorean rain forest, but Chevron does not operate there and has no significant assets in the country. It was Texaco, which Chevron acquired in a merger in 2001, that was accused of widespread environmental damage before pulling out of Ecuador in the early 1990s.

Chevron has much larger operations elsewhere in Latin America, and the plaintiffs’ strategy of pursuing the company across the region could open a contentious new phase in the case — one that would test Ecuador’s political ties with its neighbors and involve some of Washington’s most prominent lobbyists and lawyers.

Advisers to the plaintiffs said Brazil, Argentina and Venezuela would be obvious candidates to pursue Chevron assets, but they acknowledged it would not be easy. Venezuela, for instance, is a close Ecuadorean ally and its president, Hugo Chávez, is a frequent critic of the United States. But Chevron has extensive operations in Venezuela and enjoys warmer ties with Mr. Chávez’s government than just about any other American company.