Chavez vows Venezuela revolution despite Exxon

By Saul Hudson

CARACAS (Reuters) - President Hugo Chavez vowed on Saturday to keep to his self-styled socialist revolution despite Exxon Mobil winning court orders freezing up to $12 billion of Venezuela's assets in a nationalization dispute.

The American company has retaliated for Chavez's seizure last year of an Exxon project, winning the first big court battle over compensation for a takeover that the anti-U.S. president says will help create a socialist state.

Exxon's move sparked a sell-off in the OPEC nation's debt bonds this week and prompted government officials to tell Venezuelans to remain calm.

The court rulings in several countries mean state oil company PDVSA -- Chavez's main income source -- cannot sell certain assets or move some funds while the compensation case is reviewed.

"You have a multinational, imperialist company trying to damage our flagship company," Chavez said at a meeting with farmers. "But this ship will keep sailing and sailing full of oil."

"PDVSA will not sink. Venezuela will not sink. This revolution will not sink," he said, in his first comments on the legal move by the world's largest oil company.

The Venezuelan company, which has more than $90 billion in assets, finances Chavez's free spending on food subsidies, schools and clinics for the majority poor.

Investors worry the court orders could limit PDVSA's activities, make it more difficult for the company to raise capital and affect its cash flow.

PDVSA has suffered repeated refinery outages, struggled to improve production and shown signs of cash flow problems in the last year.

BATTLE FOR RESOURCES

Exxon's move was the boldest challenge yet by an international oil major against any of the governments from Russia to Ecuador that have moved to increase their control over natural resources as energy and commodity prices have soared.

The escalation of the dispute between the biggest U.S. company and Chavez, a leading proponent of resource nationalism, helped lift oil prices due to investors' concerns over sales from the No. 4 exporter to the United States.

Chavez accuses big oil companies and large consumer nations of seeking to coerce major producers such as Venezuela into hiking supply to help lower world prices.

On Saturday, he said a fair oil price was $80 a barrel, roughly in line with the current value of Venezuela's crude.

Exxon, which last week reported the largest ever profit of a U.S. company, sought the assets freeze to guarantee repayment should it win arbitration over compensation.