Venezuela moves bank accounts after Exxon freeze

By Brian Ellsworth

CARACAS (Reuters) - Venezuela has moved oil revenue into Swiss banks to avoid a possible seizure of funds by Exxon Mobil in a legal battle that pits leftist anti-U.S. President Hugo Chavez against America's biggest company.

The Texas energy giant won court rulings that froze assets belonging to Venezuelan state oil company PDVSA in a hardball maneuver meant to ensure the OPEC nation pays compensation for taking over a multibillion-dollar oil project last year.

Chavez vowed to fight back, threatening to stop oil sales to the United States -- Venezuela's biggest oil customer -- if it kept up its "economic war" through proxies such as Exxon.

On Monday, the administration of President George W. Bush, which clashes with Chavez over everything from oil prices to democracy, dismissed the warning as "something that we've heard before" from its No. 4 supplier.

Traders said PDVSA had told clients all of their payments should be made to UBS (UBSN.VX: Quote, Profile, Research, Stock Buzz) bank in Switzerland, where laws are generally believed to protect depositors' funds.

The shift came days after Exxon (XOM.N: Quote, Profile, Research, Stock Buzz) lawyers reacted to their court victories by telling Dutch Antilles banks they should limit PDVSA from moving funds from accounts there.

"It all has to go to UBS in Switzerland now," said one trader who asked not to be identified because of the sensitive nature of the issue. PDVSA had no immediate comment.

Exxon's gambit is the boldest challenge yet by an oil major against governments from Russia to Ecuador that have taken advantage of record-high oil prices to extract concessions from energy-hungry foreign oil companies.