The socialist leader rattled oil markets last Sunday when he threatened to halt shipments to the United States in retaliation for Exxon Mobil Corp's success in convincing courts in the US and Europe to freeze Venezuelan assets.

'We don't have plans to stop sending oil to the United States,' the socialist leader said on Sunday during a visit to heavy-oil projects in Venezuela's petroleum-rich Orinoco River basin that were nationalised last year.

But he added that Venezuela could cut off supplies to the United States if Washington 'attacks Venezuela or tries to harm us.' Mr Chavez has repeatedly warned against a possible US invasion he says Washington would use to seize control of Venezuela's immense oil reserves.

US officials have denied any such plan exists.

The United States relies on Venezuela for about 10 per cent of its oil imports.

The administration of Mr Chavez - a close ally of Cuban leader Fidel Castro - is locked in a legal battle with Irving, Texas-based company over compensation for the nationalization of one of four heavy oil projects in the Orinoco River basin.

Exxon Mobil - the world's largest publicly traded oil company - is seeking to freeze billions of dollars in Venezuelan assets in the United States and Europe to guarantee a payoff in the event it wins a decision by an international arbitration panel.

Last month, a British court injunction ordered up to US$12 billion (S$17 billion) of state oil company PDVSA's assets temporarily frozen.

On Thursday, Oil Minister Rafael Ramirez said Exxon Mobil is demanding more than 10 times the compensation it may deserve from Venezuela for nationalising the oil venture. -- AP