Chavez fight with "imperial" Exxon may lift support

CARACAS (Reuters) - The popularity of Venezuela's anti-American President Hugo Chavez has wavered over food shortages and crime but may be boosted by a legal battle with Exxon Mobil over compensation for a nationalized oil project.

Exxon, the largest U.S. company and a notoriously tough negotiator in oil-producing nations, has won temporary court rulings to freeze up to $12 billion of Venezuela's global assets in a fight over the level of payment for the project.

The decisions were a blow to state oil company PDVSA, which finances most social projects in the South American nation, but should burnish left-winger Chavez's credentials among citizens sensitive about foreign control of national resources, at least in the short term.

"This will probably rally his support, especially among segments of the population that have been Chavista (Chavez backers) but have recently been questioning the direction things are going in the country," said Daniel Hellinger, a political scientist at St. Louis, Missouri-based Webster University.

Voters rejected a radical constitutional reform proposal in December that would have allowed Chavez to run for reelection.

On his weekly television show on Sunday, Chavez called Exxon "imperial, American bandits," before threatening to cut oil supplies to the United States.

A government news channel repeated clips of the Exxon Valdez oil spill, overlaid with animated scenes of drops of oil turning into blood.

Exxon, which reported the highest-ever operating profit by a U.S. company last quarter, began extracting oil from Venezuela in the early 20th century. So it is an easy target for Chavez, who increased government control over several oil projects in 2007.

"It is not popular among the masses for a transnational company to freeze the nation's resources," said Luis Vicente Leon of polling company Datanalisis.

Four foreign companies affected by the takeovers accepted new terms imposed by the government, but Exxon, along with ConocoPhillips, announced they would take the case to arbitration and were then pushed out of the country.

POSSIBLE HANDICAP?

Chavez frequently accuses the United States of meddling in Latin American affairs and in the past his popularity has been bolstered by perceived attacks, including a coup that briefly ousted him in 2002 and was welcomed by Washington.

But there are signs his confrontational style is wearing thin with Venezuelans who want him to focus on day-to-day issues.

His drive to turn Venezuela into a socialist society hit a setback when he lost the December referendum, after a campaign that featured clashes with U.S. President George W. Bush, Colombian President Alvaro Uribe and the king of Spain.

Chavez lost the vote even in traditional strongholds such as slums on the hills around the capital Caracas, where voters complain of high crime and problems finding milk.

And attacks on businesses Chavez accuses of hurting food supplies by hoarding may be counter-productive, Leon said.

These elements mean his fight with Exxon could turn against him further down the line, according to the pollster.

"If the subject of Exxon mixes with the radicalism of Chavez, this could eventually become a negative handicap for the president," Leon said.

(Editing by Saul Hudson and Eric Walsh)