Chavez: Venezuela does not plan on halting oil exports to United States

Venezuelan President Hugo Chavez sent a soothing message to American motorists, saying that Venezuela is not preparing to cut off oil shipments to the United States.

The socialist leader rattled oil markets when he threatened earlier in February to halt shipments to the United States in retaliation for Exxon Mobil Corp.’s success in convincing courts in the U.S. and Europe to freeze Venezuelan assets.

“We don’t have plans to stop sending oil to the United States,” Chavez said Feb. 17 during a visit to heavy-oil projects in Venezuela’s petroleum-rich Orinoco River basin that were nationalized last year.

But he added that Venezuela could cut off supplies to the United States if Washington “attacks Venezuela or tries to harm us.”

Chavez has repeatedly warned against a possible U.S. invasion to seize control of Venezuela’s immense oil reserves. U.S. officials have denied any such plan exists.

The United States relies on Venezuela for about 10 percent of its oil imports.

The administration of Chavez — a close ally of Cuban leader Fidel Castro — is locked in a legal battle with Irving, Texas-based ExxonMobil over compensation for the nationalization of one of four heavy-oil projects in the Orinoco River basin.

ExxonMobil, the world’s largest publicly traded oil company, is seeking to freeze billions of dollars Venezuelan assets in the United States and Europe to guarantee a payoff if it wins a decision by an international arbitration panel.

In January, a British court injunction ordered the temporary freezing of up to US$12 billion in assets of state-run Petroleos de Venezuela SA, or PDVSA.

On Feb. 14, Oil Minister Rafael Ramirez said ExxonMobil is demanding more than 10 times the compensation it may deserve from Venezuela for nationalizing the oil venture.

ExxonMobil walked away from its heavy-oil upgrading operations in the Orinoco basin after Chavez’s government changed the terms of the contract. Other major oil companies, including U.S.-based Chevron Corp., France’s Total, Britain’s BP PLC, and Norway’s StatoilHydro ASA, have negotiated deals to continue on as minority partners in the Orinoco oil project.

Noting that oil prices have increased drastically in recent years, Chavez also floated the possibility Feb. 17 of establishing a new tax on foreign oil companies that continue operating in Venezuela.

—The Associated Press