UPDATE 3-US says backs Exxon in Venezuela assets battle
(Adds Republican terrorist list plan, Chavez response)
WASHINGTON Feb 13 (Reuters) - The United States on Wednesday backed Exxon Mobil Corp's effort to win compensation from Venezuela for seized assets in a case that has prompted the OPEC nation to threaten to cut off oil supplies to America.
Venezuelan President Hugo Chavez, a foe of the United States, says Exxon (XOM.N) court victories that resulted in $12 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 U.S. company over his nationalization of a project last year that was part-owned by Exxon and Britain's BP (BP.L).
Separately, Secretary of State Condoleezza Rice told lawmakers on Capitol Hill that U.S. officials were looking into whether a recently reported deal between Venezuela's state-run oil company and Iran violates U.S. law.
Rice said she was examining issues raised by Rep. Ileana Ros-Lehtinen about a reported $1 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 U.S. 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 guerrillas 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 favor of Exxon over Chavez's seizure, 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 (COP.N) quit Venezuela over a wave of nationalizations last year. BP was one of several European companies that struck deals to remain in the seized projects as minority partners.
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