US backs Exxon in Venezuela asset battle

14 Feb 2008, 2:43 pm   -   Source: AAP
Share This

The United States has backed Exxon Mobil's bid to win compensation from Venezuela for seized assets after the OPEC nation threatened to cut oil supplies.

The United States has backed Exxon Mobil's bid to win compensation from Venezuela for seized assets after the OPEC nation threatened to cut oil supplies to America.

Venezuelan President Hugo Chavez, a foe of the United States, says Exxon court victories that resulted in $US12 billion ($A13.4 billion) in Venezuelan assets being frozen over the seizure is part of an "economic war" to unseat him directed by the Bush administration.

Despite its support for Exxon, the United States denies it is working to oust Chavez and has distanced itself from the specific legal case.

"We fully support the efforts of Exxon Mobil to get a just and fair compensation package for their assets according to the standards of international law," said State Department spokesman Sean McCormack.

"But we are not involved in that dispute. It is something that has to be litigated between Venezuela and Exxon Mobil and various courts around the world," he added.

Chavez stopped oil exports to Exxon on Tuesday, escalating Venezuela's multibillion-dollar fight with the US company over his nationalisation of a project last year that was part-owned by Exxon and Britain's BP.

Separately, US Secretary of State Condoleezza Rice told lawmakers on Capitol Hill that US officials were looking into whether a recently reported deal between Venezuela's state-run oil company and Iran violates US law.

Rice said she was examining issues raised by Rep Ileana Ros-Lehtinen about a reported $US1 billion ($A1.12 billion) deal late last year between Venezuela's state-run Petroleos de Venezuela SA, which owns the Citgo subsidiary in the United States, and Iran's Petropars, a unit of the National Iranian Oil Company.

Ros-Lehtinen wrote to Rice and Treasury Secretary Henry Paulson last week asking they probe whether Citgo benefited from the company's deal with Iran. She also asked whether the deal violates the "letter or the spirit" of the US Iran Sanctions Act, intended to deter investment in Iran.

"I want to thank you for raising the question.

Of course, we're looking into it," Rice told Ros-Lehtinen, a Florida Republican, during an appearance before the House Foreign Affairs Committee. A Citgo spokesman in Houston could not be reached for comment.

A group of 21 Republican legislators, including Ros-Lehtinen, is also looking to pass a resolution that would add Venezuela to a list of countries that support terrorism.

The motion requested an investigation into whether Venezuela could be defined as providing sanctuary for terrorists.

Chavez's critics accuse him of allowing Colombia's Marxist guerillas to cross the porous border into Venezuela.

Chavez, who opposes the war in Iraq, brushed aside the accusations and said the United States should examine its own record.

"The first country that has to be on the list for supporting terrorism is called the United States," he said.

"The first on the list of people is George W Bush."

Britain, where a court issued a temporary ruling in favour of Exxon over Chavez's seizure, has also sought to distance itself from the Exxon case on Wednesday to avoid harming ties with the OPEC nation.

"The judiciary is independent. It's important to avoid that this adversely affects the good ties we have with Venezuela," British Ambassador Catherine Royle told reporters after dozens of Venezuelans protested the court ruling outside the embassy in Caracas.

Exxon and fellow American oil company ConocoPhillips quit Venezuela over a wave of nationalisations last year.

BP was one of several European companies that struck deals to remain in the seized projects as minority partners.

  • Follow us: 
  • Follow us on Facebook
  • Follow us on Twitter
  • Follow us on Youtube