By Steven Mufson
Washington Post Staff Writer
Saturday, February 16, 2008

Venezuela has settled a spat with one oil giant while continuing to heap invective on another.

Venezuela's ambassador to the United States yesterday compared Exxon Mobil's strategy in a contract dispute to "the very discredited strategy of 'preemptive war' " and said the Texas-based oil firm had vastly overstated the value of its share in a nationalized venture.

Separately, ENI, the Italian oil giant, said it had settled its year-old dispute over Venezuela's seizure of the Dacion field. ENI said Venezuela agreed to pay book value for ENI's interest in the field, which produces 62,000 barrels a day. ENI said the accord could lead to development deals in Venezuela's Orinoco region.

Ambassador Bernardo Alvarez Herrera made his comments about Exxon in a letter to Sen. Richard G. Lugar (R-Ind.), who this week warned Venezuela against carrying out threats made by President Hugo Ch¿vez to cut off oil exports to the United States over the dispute.

Lugar on Wednesday urged Venezuela to resolve its dispute with Exxon "within the legal framework." He warned that "the consequences of Venezuela no longer being seen as a reliable trading partner could be catastrophic for its domestic production," and said that Venezuelans "could suffer tremendously . . . if oil revenues are lost."

But Alvarez said it was Exxon that had "chosen to ignore the rules of the game and instead exert unilateral and coercive pressure on Venezuela." He added that Exxon, which has obtained court orders freezing $12 billion of assets belonging to Venezuela and its state oil company, had exaggerated its claim, which he called "clearly absurd."

Joseph D. Pizzurro, a lawyer representing state-owned Petroleos de Venezuela, said that in negotiations Exxon had asked for only $5 billion in compensation for its share of two ventures taken over by the state oil company. So far, Exxon has written off $750 million in connection with the dispute.