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Chavez threatens to stop shipping oil to U.S.

President Hugo Chavez on Sunday threatened to cut off oil sales to the United States if Exxon Mobil Corp. wins court judgments to seize his government's assets.
/ Source: The Associated Press

President Hugo Chavez on Sunday threatened to cut off oil sales to the United States in an "economic war" if Exxon Mobil Corp. wins court judgments to seize billions of dollars in Venezuelan assets.

"If you end up freezing (Venezuelan assets) and it harms us, we're going to harm you," Chavez said, turning his words to U.S. President George W. Bush. "Do you know how? We aren't going to send oil to the United States. Take note, Mr. Bush, Mr. Danger."

Exxon Mobil has gone after the assets of Venezuela's state oil company, Petroleos de Venezuela SA, in U.S., British and Dutch courts as it challenges the nationalization of a multibillion dollar oil project by Chavez's government last year. A British court has issued an injunction "freezing" as much as US$12 billion in assets.

"I speak to the U.S. empire, because that's the master: continue and you will see that we won't send one drop of oil to the empire of the United States," Chavez said during his weekly radio and television program, "Hello, President."

"The outlaws of Exxon Mobil will never again rob us," said Chavez, accusing the Irving, Texas-based oil giant of acting in concert with Washington and being part of corporate "worldwide mafias."

Chavez has repeatedly threatened to cut off oil shipments to the United States, which is Venezuela's No. 1 client, if Washington tries to oust him. Chavez's warnings on Sunday appeared to extend that threat to attempts by oil companies to challenge his government's nationalization drive through lawsuits.

"If the economic war continues against Venezuela, the price of oil is going to reach $200 (a barrel) and Venezuela will join the economic war," Chavez said. "And more than one country is willing to accompany us in the economic war."

Exxon Mobil spokeswoman Margaret Ross said the company had no comment. A U.S. Embassy spokeswoman in Caracas did not return a call.

Chavez made the remarks along with other accusations that right-wing militias from Colombia are arming drug-dealing criminals in Caracas in what he called a U.S.-supported plot. Chavez provided no evidence as he said Colombian paramilitary fighters are in the barrios of Caracas doling out weapons and "selling cocaine below the market price, very cheap."

The U.S. imported 1.23 million barrels of crude oil a day from Venezuela in November, making it the fourth-biggest source of oil imports behind Canada, Saudi Arabia and Mexico, according to the latest figures from the U.S. Energy Department.

Those four countries, along with Nigeria, accounted for 74 percent of U.S. crude oil imports in November, the government said. By itself, Venezuela accounted for about 12 percent of U.S. crude imports, the figures showed.

Venezuelan Oil Minister Rafael Ramirez has argued that court orders won by Exxon Mobil have "no effect" on the state oil company PDVSA and are merely "transitory measures" while Venezuela presents its case in courts in New York and London.

Exxon Mobil is also taking its claims to international arbitration, disputing the terms it was granted under Chavez's nationalization last year of four heavy oil projects in the Orinoco River basin, one of the world's richest oil deposits.

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 with Venezuela to continue on as minority partners in the Orinoco oil project.

ConocoPhillips and Exxon Mobil, however, balked at the tougher terms and have been in compensation talks with PDVSA.