Venezuela Downplays Exxon Terrorist Asset Freeze

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 ofthe major U.S. supplier’s energy assets.

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

Exxon "aims to subject us to a situation of judicial terrorism, oflegal terrorism," Oil Minister Rafael Ramirez told reporters. "We arenot 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 overcompensation for a multibillion-dollar project that Chavez seized lastyear in a wave of nationalizations of U.S. and European companies’assets.

Exxon’s move is the boldest challenge yet by an international oilmajor against any of the governments around the world that have movedto increase their control over natural resources as energy andcommodity prices have soared.

The oil minister’s effort to downplay the impact of the court orderscame a day after the value of Venezuelan debt plunged. Investorsworried they could limit the activities the state oil company — thegovernment’s main income source.

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

Ramirez scoffed at the world’s largest oil company’s compensationdemands as "ridiculous" and accused it of violating arbitrationproceedings.

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 theoperations of the assets involved and that their real value was farless than $12 billion.

OIL BATTLE

The move underscored Exxon’s reputation for toughness in dealingwith foes as varied as governments and fishermen, as it has beenwilling to wage prolonged legal battles to defend its interests aroundthe world.

But Venezuela seized on the case to highlight its accusations thatforeign companies — supported by the United States — are againstChavez because he has increased his control over some of the world’slargest oil deposits.

"For a long time we have been denouncing Exxon Mobil as the typicalmultinational, U.S. company that has tried to attack oil producingcountries," 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 tofree 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 answerto that question was no. They are pursuing their corporate interests inaccordance with their needs," State Department spokesman Tom Casey said.

"The view of the U.S. government is that neither Exxon nor anyAmerican company, nor any company anywhere any place at any time in theworld, should have their property expropriated or nationalized withoutfair and just compensation, according to international rules," he added.

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

CopyrightReuters 2008. All rights reserved. Users may download and print extracts ofcontent from this website for their own personal and non-commercial use only.Republication or redistribution of Reuters content, including by framing orsimilar means, is expressly prohibited without the prior written consent ofReuters. Reuters and the Reuters sphere logo are registered trademarks ortrademarks of the Reuters group of companies around the world.