Venezuela President: No Plan To Halt US Oil Shipments

CARACAS (AP)–President Hugo Chavez sent a soothing message to U.S. motorists,
saying that Venezuela is not preparing to cut off oil shipments to the U.S.

The socialist leader rattled oil markets when he threatened a week ago to halt
shipments to the U.S. in retaliation for Exxon Mobil Corp.'s (XOM) 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
Sunday 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 U.S. 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 U.S. relies on Venezuela for about 10% 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 Exxon Mobil over compensation
for the nationalization of one of four heavy-oil projects in the Orinoco River
basin.

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

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

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

Exxon Mobil 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 Sunday of establishing a new tax on foreign oil
companies that continue operating in Venezuela.

Without revealing details, Chavez told Ramirez and other top PDVSA officials
to begin preparing "a recommendation for what we could call a tax on sudden
earnings."