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Chavez threatens to cut off U.S. oil shipments

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  • NEW: Chavez threatens to cut off oil sales to U.S. if Exxon Mobil seizes assets
  • Venezuelan oil minister says $300M in cash frozen, not $12 billion assets
  • Rafael Ramirez says Exxon is challenging a nationalization project
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(CNN) -- Venezuelan President Hugo Chavez threatened Sunday to cut off his country's oil shipments to the United States if a court ruling goes forward ordering Venezuelan assets be frozen in a case brought by Exxon Mobil.

The dispute centers on President Hugo Chavez's nationalization of heavy oil projects.

"One court orders that Venezuela be frozen," he said on his weekly television and radio program "Hello, President." "If you wind up freezing and hurt us, we will hurt you. Do you know how? We are not going to send oil to the United States."

He continued, "Bandits from Exxon Mobil, you will never again rob from us ... world-wide mafia ... that is Exxon Mobil. It is one of the companies at the tip of imperialism's lance."

Last week, Exxon Mobil obtained a court order freezing up to $12 billion of Venezuela's state-owned oil company's worldwide assets after the Chavez government forced the company out of two joint ventures last year.

Britain's High Court barred Petroleos de Venezuela S.A. (PdVSA) from selling assets up to that amount, Exxon Mobil spokeswoman Margaret Ross said last week.

The judgment stems from Venezuela's June decision to take control of two projects it had entered into with Exxon, the world's largest publicly traded oil company.

One, the Cerro Negro Project, was projected to yield 1.5 billion barrels of oil over 35 years.

Ross said Exxon Mobil also obtained attachment orders against PdVSA from courts in the Netherlands and the Dutch Caribbean islands seeking another $12 billion each, and is seeking another attachment order of approximately $300 million against the Venezuelan company in a federal court in New York.

In a January 24 filing in New York, PdVSA argued that Exxon Mobil "has failed to sustain its burden of establishing that an arbitration award may be rendered ineffectual without the provisional remedy of attachment."

The United States is Venezuela's biggest customer for the oil-rich nation's petroleum products, importing about 1.4 million barrels of oil per day from Venezuela, according to the U.S. Department of Energy. Exxon Mobil did not immediately return a call on Sunday seeking comment.

A petroleum market analyst said the threat may be no more than posturing. But even if Chavez were to carry out his threat, said Trilby Lundberg, the result would not prove insurmountable for the United States.

"It would do great damage to Venezuela and the relationship with the U.S. and turn off other Western partners with Venezuela," Lundberg told CNN in a telephone interview. "However, for the U.S., it would likely not have any sustaining terrible effect, because the world of oil is fluid, and wherever Venezuelan oil goes, some other oil would be freed up for the United States to import." E-mail to a friend E-mail to a friend

All About Exxon Mobil CorporationVenezuelaHugo Chavez

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