Larry Rohter, New York Times Friday, December 27, 2002

Rio de Janeiro -- In a show of support for Hugo Chavez, Venezuela's embattled president, the Brazilian government has sent an emergency shipment of 520,000 barrels of gasoline to help relieve shortages caused by a nationwide general strike, government officials here said Thursday.

Venezuela is the world's fifth-largest oil producer and a major exporter to the United States. But executives and an estimated 30,000 workers of the Venezuelan state oil company have adhered to the four-week strike, causing oil production to plunge and leading to growing shortages at gas stations.

A spokeswoman for Brazil's state oil company, Petrobras, confirmed that the shipment, made at Chavez's personal request, was on its way to Venezuela. She said the vessel was expected to arrive today or Saturday.

Commercial and political ties between the two countries have strengthened considerably since Chavez took office in February 1999, proclaiming his intent to lead a peaceful social revolution. President Fernando Henrique Cardoso of Brazil approved the gasoline shipment, and there are indications that his successor-elect, Luiz Inacio Lula da Silva, of the left-wing Workers Party, was involved in the decision.

Da Silva takes office Wednesday and has a long-standing personal and ideological affinity with Chavez, who also is reported to have asked Brazil to supply crews to operate Venezuelan oil tankers.

"He thinks like I do," da Silva said earlier this year, adding that while the Venezuelan leader can be "excessively impetuous" at times, he is "a killer ball-handler" who deserves praise for his daring.

Chavez in turn has said, "Lula is a great man." After da Silva won a landslide victory in October, Chavez said he hoped Brazil would join Venezuela and Cuba in establishing an "axis of good" in the hemisphere.

Earlier this month, da Silva sent one of his chief foreign policy advisers, Marco Aurelio Garcia, to Caracas to assess the crisis. In interviews with Brazilian newspapers after his return, Garcia said the new Brazilian government wanted to "contribute to Venezuelan stability" and accused Chavez's foes of seeking to provoke "a situation of uncontrollable violence" that would cripple the world economy.

"Imagine the No. 5 oil producer with a civil war and Iraq with a war that is not at all civil," Garcia told the Rio de Janeiro daily O Globo in an article published Tuesday. "That would bring disastrous consequences."

Brazil's action has been condemned by strike organizers in Venezuela. They maintain that Brazil is violating a neutrality policy among Latin American nations and is illegally trying to break the strike.

"Brazil needs to understand that a political crisis exists in Venezuela and that it must be resolved by Venezuelans," Antonio Ledezma, a former mayor of Caracas, said in an interview with a Brazilian newspaper.

The move also has drawn comment in Brazil, particularly in view of da Silva's origins as a labor leader who was jailed for leading walkouts.

"To see the Workers Party playing the role of strike-buster is like that MasterCard commercial -- 'priceless,' " Ancelmo Gois wrote Thursday in O Globo.

In Venezuela on Thursday, thousands of people renewed their protests on the 25th day of the opposition strike to force Chavez to call elections. Executives of the state-owned oil monopoly Petroleos de Venezuela S.A staged a rally shouting, "Not one step back!" and "We are not afraid!" as speakers denounced government firings of striking oil workers and arrests of tanker crews.

Fears of the strike continuing well into 2003 and of possible war in Iraq sent oil prices above $32 a barrel, the highest they have been in two years.

The Associated Press contributed to this report.

Venezuela output well below normal BY PHIL GUNSON Special to The Miami Herald

The Venezuelan oil industry remains in a critical condition, despite claims by the government of President Hugo Chávez that what it calls ''sabotage'' by striking managers is under control and that crude oil and refined products for both the domestic and foreign markets will soon be flowing normally.

In a Christmas Eve interview with foreign correspondents, Alí Rodríguez, chairman of the state oil corporation PdVSA, described as ''titanic'' efforts to resume normal operations. But Juan Fernández, leader of the dissident managers, dismissed those attempts as ''merely [applying] hot towels'' to the crisis.

The giant Amuay-Cardon refinery complex, for instance, with its 940,000-barrel daily capacity, remains shut down. Only the Puerto La Cruz refinery, operating at well below 50 percent capacity, is in a position to produce gasoline.

The tanker Pilin León, whose striking crew held out at anchor for 17 days before being replaced by officers the merchant navy insists are unqualified, loaded 230,000 barrels of gasoline and 50,000 of diesel at Cardon on Christmas Day, according to the government.

The fuel is due to be unloaded today at the Carenero terminal, for shipment by pipeline to Caracas. That would represent perhaps two days' worth for Venezuelan consumers.

However, Capt. José Jesús Jiménez of the tanker Paramacay said the Pilin León ``did not fully load . . . [and] the last [gasoline] at Cardon is now gone. The idea now is for the Maritza Sayalero to dock at Amuay and take the little gasoline that remains there.''

The Paramacay, along with four other Venezuelan vessels, remains at anchor near Amuay-Cardon. Most of the PDV-Marina fleet remains paralyzed, while exports are running at below 10 percent of normal.

''They haven't bothered us since Dec. 9,'' Jiménez said. ''At the beginning, they cut off our food. Then they cut off the water.'' But supplies were later restored, he said. ``I think they're afraid of trying anything with us because of the danger.''

The Paramacay, which is part-loaded with isobutane -- a fuel additive -- is even more dangerous than a tanker loaded with gasoline, the captain said.

Other crews, however, have reported increasing levels of harassment, including what the merchant navy union calls physical and psychological torture. ''They have even taken officers out onto the deck in their underwear and put 9mm pistols to their heads,'' Capt. José Luis Blandín, the union president, told a press conference Thursday.

Three captains have reportedly been hospitalized with stress-related conditions.

Today, the union is to ask the supreme court to intervene to stop what it calls human rights violations. It is asking for the people of Caracas to demonstrate outside the court in support of the plea.

Meanwhile, the world's fifth-biggest oil exporter is beginning to import gasoline. The tanker Amazon Explorer, with 520,000 barrels of unleaded gas, is on its way from Brazil as part of a controversial agreement between Chávez and the incoming government of Luiz Inácio Lula da Silva.

Without a settlement to the strike, however, experts doubt that even a semblance of normality can be attained.

In the city of Mérida, one of the worst-hit, gas lines are now measured in days rather than hours, and places in line are being sold.

''Place number 400, for example, will cost you 25,000 bolivares [about $18],'' said political analyst Alberto Garrido in a phone interview from the Andean city.

''There is no cooking gas, and people are selling firewood in the streets,'' Garrido added.

Jorge Kamkoff, a member of the PdVSA board who resigned over the government's handling of the strike, said the industry could not be normalized ``with all the people they have, nor by bringing in everyone, of all nationalities.''

Brazil's state-owned oil company will raise fuel prices by almost 10% on Sunday because of a reduction in global output.

The increases is expected to push Brazil's inflation rate above the 11% mark.

Prices have already been rising after the currency, the real, lost 35% of its value because of speculators' fears about leftist President-elect Luiz Inacio Lula da Silva.

Petrobras said the price of cooking gas for consumers will increase 7.7%.

Global oil prices have risen sharply because of US threats to start a war with Iraq and a strike in Venezuela against President Hugo Chavez, which has brought output at the world's fifth largest oil exporter to a standstill.

Hostage to markets

Brazilian fuel prices are at the mercy of international oil and currency markets.

The country's fuel market was deregulated last January and Petrobras has been adjusting its prices in accordance.

Despite being a substantial exporter of oil, Brazil lacks refining capactiy and must import about a quarter of the 1.8 million barrels that it consumes daily.

Petrobras also imports about 40% of the natural gas used in the country.

news.bbc.co.uk

Brazil's state-owned oil company will raise fuel prices by almost 10% on Sunday because of a reduction in global output.

The increases is expected to push Brazil's inflation rate above the 11% mark.

Prices have already been rising after the currency, the real, lost 35% of its value because of speculators' fears about leftist President-elect Luiz Inacio Lula da Silva.

Petrobras said the price of cooking gas for consumers will increase 7.7%.

Global oil prices have risen sharply because of US threats to start a war with Iraq and a strike in Venezuela against President Hugo Chavez, which has brought output at the world's fifth largest oil exporter to a standstill.

Hostage to markets

Brazilian fuel prices are at the mercy of international oil and currency markets.

The country's fuel market was deregulated last January and Petrobras has been adjusting its prices in accordance.

Despite being a substantial exporter of oil, Brazil lacks refining capactiy and must import about a quarter of the 1.8 million barrels that it consumes daily.

Petrobras also imports about 40% of the natural gas used in the country.

news.ft.com By Andy Webb-Vidal in Caracas Published: December 28 2002 4:00 | Last Updated: December 28 2002 4:00 Venezuela is this weekend expected to take delivery of a shipment of petrol from Brazil, marking what industry analysts say will be the first time the nation has needed to import fuel in modern times.

A skeleton staff of dockers at Puerto La Cruz, in the east, were last night preparing to berth and unload the Amazon Explorer, a tanker laden with 520,000 barrels of petrol from Petrobrás, Brazil's state oil company.

That Venezuela, until a month ago the world's fifth largest exporter, has begun importing fuel demonstrates the size of the crisis gripping the country's oil industry and economy as a result of a strike by managers and workers at state-owned Petróleos de Venezuela (PDVSA).

The stoppage by an estimated 30,000 oil workers, who are demanding that President Hugo Chávez resign and call early elections, is now into its 27th day, with no sign of an end.

Ramón Espinasa, an oil industry consultant at the Inter-American Development Bank and a former chief economist at PDVSA, said the importing of petrol showed the severity of the strike at the oil company. "Its refineries are practically shut."

Before the strike began at the beginning of the month, PDVSA was producing 2.85m barrels of oil per day and exporting 2.4m b/d, with more than half going to the US.

But with only the refinery at Puerto La Cruz operational, refined product output has dropped to 68,000 b/d, cutting off exports and starving the domestic market of fuel and cooking gas. Motorists wait for up to 70 hours for rationed quantities of fuel in the capital.

The shipment from Brazil was requested by Mr Chávez and received the approval of both Fernando Henrique Cardoso, Brazil's president, and Luiz Inácio Lula da Silva, president-elect, who is due to take office next week.

Political opponents of Mr Chávez reacted angrily to news that fuel imports were on their way and accused the Brazilian government of interfering in Venezuela's domestic affairs.

Due to food shortages arising from the strike, Venezuela this week also began importing basic foodstuffs, including meat and milk from neighbouring Colombia and rice from the Dominican Republic.