Chávez threatens to end oil exports to U.S.

11:08, 11 February 2008
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The warning ratchets up a fierce legal dispute

President Hugo Chávez has threatened to halt oil exports to the United States if Exxon Mobil succeeds in freezing billions of dollars in foreign petroleum assets controlled by Venezuela, according to an article by Simon Romero, the International Herald Tribune.

The warning, which came Sunday, ratchets up a fierce legal dispute between Venezuela and Exxon after Chávez`s move to exert greater state control over his country`s oil industry last year. Rather than submitting to Venezuela`s terms, Exxon withdrew from a major production venture, intensifying the feud.

"The bandits of Exxon Mobil will never rob us again," Chávez said in comments broadcast Sunday on his weekly television program.

He accused Exxon, one of the largest publicly traded oil companies, and the United States of a conspiracy to destabilize Venezuela.

"I speak to the American empire, because that`s the master," Chávez said. "Continue, and you will see that we won`t send one drop of oil to the empire of the United States." Referring to Exxon, he said, "They are imperialist bandits, white-collar criminals, corrupters of governments, overthrowers of governments."

Venezuela`s government has been seething since Exxon recently won orders in British, Dutch and American courts to freeze as much as $12 billion in Venezuelan oil assets abroad - refineries and other oil-related infrastructure that Venezuela owns. Venezuela vowed to overturn the decisions before arbitration over Exxon`s attempts to win compensation for its nationalized oil project.

After Chávez spoke, an Exxon spokeswoman, Margaret Ross, said, "We have no comment."

Chávez has repeatedly threatened to cut off oil supplies to the United States but has never done so.

In fact, despite a deterioration in political relations, the United States remains Venezuela`s top trading partner. Venezuela is the fourth-largest supplier of crude oil to the United States, sending 1.2 million barrels a day to American refineries, according to the Energy Information Administration in Washington.

The dispute with Exxon is focusing attention on Petroleos de Venezuela, the national oil company, which Chávez has purged of his political opponents and reconfigured to finance social welfare projects. The company faces steeper borrowing costs after the price of its bonds plunged by 3 percent on Friday, to 66.75 cents on the dollar.

Declining oil production at Petróleos de Venezuela has allowed other countries in OPEC, notably Saudi Arabia, to gain a greater share of the market in meeting the expanding global demand for oil. The problems at Petróleos de Venezuela, a major revenue source for Chávez, are occurring amid growing discontent over food shortages and galloping inflation.

The tension with Exxon was just one of Chávez`s subjects on Sunday. He also accused the United States and Colombia of bringing paramilitary squads to Venezuela to traffic in weapons and cocaine. And he said his political opponents were plotting to "reconvert Venezuela into a North American colony."

Kiev seeks Gazprom deal

Ukraine is willing to settle its natural gas debts with Gazprom, the Russian natural gas monopoly, if the country can have a direct import agreement with it, First Deputy Prime Minister Oleksandr Turchynov said Sunday, Reuters reported from Kiev.

Gazprom has threatened to cut some supplies to Ukraine if the state energy company Naftogaz does not settle a debt of $1.5 billion by Monday.

Ukraine`s new government, which is led by Prime Minister Yulia Tymoshenko, wants to avoid supply intermediaries, especially RosUkrEnergo, which is partly owned by Gazprom, because it says that their existence raises import prices for natural gas and that their structures are opaque and vulnerable to corruption.

"The first deputy prime minister confirms that Naftogaz indeed has debts," said a statement posted on the government`s Web site Sunday. "Naftogaz is ready to commit to full repayment of its debt in exchange for an agreement to sign a direct contract and relevant documents with Russia`s Gazprom."

Russia and Ukraine have assured Europe - which receives a quarter of its gas from Russia, most of it via Ukraine - that the dispute would not disrupt westward natural gas supplies.

By Simon Romero, the International Herald Tribune

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