Chavez fight with "imperial" Exxon may lift support

By Frank Jack Daniel

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.