Venezuela Downplays Exxon Terrorist Asset Freeze

By Reuters -  |  Posted 2008-02-08 Print this article Print

Venezuela said its oil exports, operations and cash flow were unaffected by Exxon Mobil's "terrorist" move that won court orders freezing up to $12 billion of the major U.S. supplier's energy assets.

CARACAS (Reuters) - Venezuela said on Friday its oil exports, operations and cash flow were unaffected by Exxon Mobil Corp's "terrorist" move that won court orders freezing up to $12 billion of the major U.S. supplier's energy assets.

The government of anti-U.S. President Hugo Chavez accused the largest American company of seeking to destabilize the OPEC nation by using a legal case to create panic over its finances.

Exxon "aims to subject us to a situation of judicial terrorism, of legal terrorism," Oil Minister Rafael Ramirez told reporters. "We are not going to back down, we are going to beat them in this battle."

Exxon (XOM.N: Quote, Profile, Research) sought the freeze to guarantee repayment should it win arbitration over compensation for a multibillion-dollar project that Chavez seized last year in a wave of nationalizations of U.S. and European companies' assets.

Exxon's move is the boldest challenge yet by an international oil major against any of the governments around the world that have moved to increase their control over natural resources as energy and commodity prices have soared.

The oil minister's effort to downplay the impact of the court orders came a day after the value of Venezuelan debt plunged. Investors worried they could limit the activities the state oil company -- the government's main income source.

With high world oil prices, Chavez has relied on oil exports to finance popular food subsidies and school building programs for the majority poor in his self-styled socialist revolution.

Ramirez scoffed at the world's largest oil company's compensation demands as "ridiculous" and accused it of violating arbitration proceedings.

In the next week, Venezuela will make its legal response to seek a reversal of the rulings, he said.

Exxon won court orders in Britain, the Netherlands and the Dutch Antilles freezing assets of state oil company PDVSA.

But Ramirez said the rulings were temporary, did not affect the operations of the assets involved and that their real value was far less than $12 billion.


The move underscored Exxon's reputation for toughness in dealing with foes as varied as governments and fishermen, as it has been willing to wage prolonged legal battles to defend its interests around the world.

But Venezuela seized on the case to highlight its accusations that foreign companies -- supported by the United States -- are against Chavez because he has increased his control over some of the world's largest oil deposits.

"For a long time we have been denouncing Exxon Mobil as the typical multinational, U.S. company that has tried to attack oil producing countries," Ramirez said.

The United States is Venezuela's biggest oil customer.

But Chavez, who regularly hurls insults at President George W. Bush, clashes with Washington over everything from oil prices to democracy to free trade.

The U.S. government quickly sought to distance itself from Exxon's legal battle with Chavez.

"Has the U.S. government put Exxon up to doing this? ... The answer to that question was no. They are pursuing their corporate interests in accordance with their needs," State Department spokesman Tom Casey said.

"The view of the U.S. government is that neither Exxon nor any American company, nor any company anywhere any place at any time in the world, should have their property expropriated or nationalized without fair and just compensation, according to international rules," he added.

(Additional reporting by Susan Cornwell in Washington; Writing by Saul Hudson, Editing by Marguerita Choy)

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