Eric Watkins
Senior Correspondent
LOS ANGELES, Feb. 14 -- Venezuela's state-owned Petroleos de Venezuela SA said it has stopped selling crude oil to ExxonMobil Corp., which earlier began using US and British courts to seize billions of dollars in assets owned by the South American nation (OGJ Online, Feb. 12, 2008).
In a statement, PDVSA said it "has paralyzed" sales of crude to ExxonMobil and suspended commercial relations with the company. "The legal actions carried out by the US transnational are unnecessary...and hostile," it said.
ExxonMobil is using legal challenges to Venezuela's nationalization of one of four heavy oil projects in the Orinoco River basin. A British court last month issued an injunction freezing around $12 billion of PDVSA assets, while a US court granted an "order of attachment" on $300 million in cash held by PDVSA.
Venezuelan Oil Minister Rafael Ramirez, who said his country exports 1.5 million b/d of crude oil and products, vowed Feb. 12 that Venezuela is ready to cut off oil supplies to the US if pressed into an "economic war."
"If they want this conflict to escalate, it's going to escalate. We have a way to make this conflict escalate," Ramirez told local media. Meanwhile, Venezuelan state television began airing short anti-Exxon segments, with an on-screen message in red text reading: "ExxonMobil turns oil into blood."
Nobuo Tanaka, executive director of the International Energy Agency, voiced concern over the possible impact of Venezuela's action on the international market, saying the IEA is closely watching the situation.
Sources in the US administration, however, said Washington has been assured by other major exporters of crude oil that they will compensate for any losses to the US caused by the suspension of Venezuelan supplies.
Contact Eric Watkins at [email protected].
