CARACAS (Reuters) - Venezuela could sue Exxon Mobil for not paying taxes on some of the oil it produced, President Hugo Chavez said yesterday, amid an escalating legal battle with Exxon over compensation for nationalised assets.

Exxon recently won court orders freezing up to $12 billion in Venezuelan assets, leading Chavez to repeat threats that he could cut oil sales to the US and helping lift crude oil prices by nearly $4 per barrel last week.

Chavez yesterday said Venezuela could sue Exxon for unpaid taxes on 500,000 barrels of early production in the Cerro Negro heavy crude project that Venezuela took over last May.

"They took 500,000 barrels of crude from here without registering it," Chavez said during his weekly broadcast, held at Cerro Negro

"This is...another reason to sue Exxon Mobil and (make them) pay us for what they stole."

He also accused Exxon of making only the minimum necessary investments, recovering some six percent of the tar-like Orinoco oil and leaving the rest in the ground.

"It's like you kill a cow and only take the filet mignon and leave the rest to rot," he said.

Venezuela last week cut commercial ties with Exxon to protest the legal assault, though Exxon and US authorities said the company would easily replace the oil.

The OPEC nation in 2007 took over four multi-billion dollar heavy oil projects from foreign companies, pushing out Exxon Mobil and ConocoPhillips in the process, and leading both companies to file arbitration suits.

Venezuela says it has maintained friendly talks with Conoco after accusing it last year of not cooperating in the takeover process.

Exxon originally asked for $5 billion in compensation for the project, but later upped its demands to $12 billion, according to a lawyer for state oil company PDVSA, which says Exxon should only receive about $750 million dollars.

A US court last week upheld a temporary injunction that Exxon requested to freeze some $300 million in PDVSA funds.

Chavez has described Exxon's legal fight as a plan orchestrated by the US, which depends on Venezuela for around 12 percent of its oil imports, to damage his self-styled socialist revolution.

The leftist leader yesterday repeated threats to halt exports to the US if Washington attacks the OPEC nation.

"If the United States...attacks Venezuela and tries to harm us, we will have to make the decision not to send a single drop of our oil to the United States," he said.