Venezuela's oil minister Rafael Ramirez on Friday downplayed the rulings, reassuring investors they had little impact on the supplies, operations or cash flow of the state oil company, PDVSA, which he said has about US$100 billion in assets.

He said the largest American company hoped to destabilise the government of anti-US President Hugo Chavez by using the legal battle over the nationalisation of an Exxon project to create panic about the Organisation of Petroleum Exporting Country (Opec) nation's finances.

Exxon, which last week reported the largest ever profit of a US company, sought the freeze to guarantee repayment should it win arbitration over compensation for the project seized in a wave of Chavez takeovers last year.

Exxon 'aims to subject us to a situation of judicial terrorism, of legal terrorism', Mr Ramirez told reporters. 'We are not going to back down, we are going to beat them in this battle.'

The escalation of the dispute between the world's largest oil company and Mr 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.

Exxon has won court orders in Britain, the Netherlands and the Dutch Antilles freezing assets of state oil company PDVSA.

The company said US law made it too difficult to go after Venezuela's most valuable overseas asset - Citgo, the eighth largest oil refiner in the United States.

The value of Venezuela's debt fell as investors also worried the rulings would limit the activities of PDVSA, which is the main source of government income and has shown signs of cash flow problems as it finances Mr Chavez's social programmes.

But credit ratings agency Fitch dismissed concern over any impact on the day-to-day operations and credit-worthiness of a company whose assets include refineries and storage terminals from the Caribbean to the United States to Europe.

'At the end of the day, as long as they have US$12 billion in assets anywhere in the world, they are in compliance with this court order,' Ms Gianna Bern, senior director at Fitch Ratings Latin America Corporate Finance, said.

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

It underscored Exxon's reputation for aggressively dealing with foes and its willingness to wage prolonged legal battles to defend its interests around the world.

The US government quickly sought to distance itself from Exxon's legal battle with Mr Chavez.

But Venezuela seized on the case to highlight its accusations that foreign companies - supported by the United States - are against Mr Chavez because he has increased his control over some of the world's largest oil deposits.

'For a long time we have been denouncing Exxon Mobil as the typical multinational, US company that has tried to attack oil producing countries,' Mr Ramirez said.

In the next week, Venezuela will make its legal response to seek a reversal of the rulings, which were temporary and did not affect the operations of the assets involved, he said, adding their real value was far less than US$12 billion.

He scoffed at Exxon's compensation demands as 'ridiculous'. With high world oil prices, Mr Chavez has relied on oil sales to pay for popular food subsidies and school building programmes for the majority poor in his self-styled socialist revolution.

Mr Chavez clashes with Washington over everything from oil prices to democracy to free trade.

The United States, Venezuela's biggest oil customer, stressed the dispute was between Venezuela - and not the Bush administration.

'Has the US government put Exxon up to doing this? ... The answer to that question was no. They are pursuing their corporate interests in accordance with their needs,' State Department spokesman Tom Casey said. -- REUTERS