www.alertnet.org 11 Jan 2003 22:07

(Adds Chavez, opposition comments paragraph 9, 13-14, 19) By Patrick Markey

CARACAS, Venezuela, Jan 11 (Reuters) - Opponents of Venezuela's President Hugo Chavez sought on Saturday to shore up international support for their fight to force the embattled leftist leader to resign and call elections in the Latin American nation, the world's fifth largest petroleum exporter.

Opposition leaders, staging a six-week strike that has crippled Venezuelan oil exports and rattled energy markets, said they welcomed U.S. backing for a proposal that would involve other nations in efforts to break the stalemate over the president's rule.

Opposition negotiator Timoteo Zambrano and union boss Carlos Ortega, a bitter Chavez foe, planned to travel to the United States on Saturday for meetings with United Nations Secretary-General Kofi Annan and the U.S. State Department.

"This is to explain the Venezuelan conflict, to intensify our international actions, and to make sure there is more attention to the Venezuelan problem from the international community," Zambrano told Reuters by telephone from Caracas airport before leaving.

The strike, started on Dec. 2, has stoked tensions between the president's supporters and opponents, who have been locked in a fierce struggle since April when Chavez survived a short-lived coup by rebel officers.

The United States said on Friday it supports forming a group of key regional nations who could nudge both sides to an electoral solution to end their bitter impasse. U.S. officials said they hoped to bolster talks brokered by the Organization of American States that have so far failed to reach an accord.

Increased U.S. backing for the peace initiative came after the strike helped push oil prices to two-year highs of over $30 a barrel at a time when Washington is preparing for a possible attack on Iraq. Venezuela usually supplies more than 13 percent of U.S. oil imports.

'FASCISTS AND TERRORISTS'

Chavez, who accuses his foes of trying to illegally topple him, said he had also spoken with the U.N. chief to explain he was fighting against a group of "terrorists, coup mongers and fascists." He vowed Saturday to defeat the strike.

"The government will take all measures that it must within the boundaries of the constitution," he told supporters in a speech peppered with revolutionary rhetoric and threats.

Chavez, elected in 1998 on a populist platform of social reform, portrays himself as a champion of the poor abandoned by corrupt elites. Most Venezuelans still live in poverty in spite of their nation's huge oil wealth.

But opposition leaders say Chavez, rather than live up to his election promises to ease poverty, has driven Venezuela toward economic and political chaos through mismanagement, corruption and dictatorial rule.

They want Chavez to accept elections within the next three months and agree to a nonbinding referendum on his rule in February. But the combative president refuses and has challenged the poll in the supreme court. He says the constitution only allows a binding referendum in August.

"If we want to go to the vote, it's because we want to fight the poverty and misery that this regime forces us to live with," said anti-Chavez business leader Carlos Fernandez.

Fernandez urged opposition sympathizers to take to the streets again on Sunday for a march in Caracas near the capital's military headquarters. Two people were killed and dozens wounded by gunfire in a similar march earlier this month during clashes involving rival protesters, police and troops.

BATTLE OVER OIL, FOOD, EDUCATION

The political conflict has now essentially become a war over the oil industry, which provides for about half of the government's revenues.

Crude and product exports have fallen to less than a fifth of the 2.7 million barrels per day sold before the shutdown and production has dropped to about 450,000 bpd from 3.1 million bpd in November, officials said.

Chavez has sent troops to take over installations and substitute workers to replace striking crews. He has fired more than a thousand workers at state oil firm PDVSA and started to restructuring the company to try and break the strike.

But strike leaders, including rebel PDVSA managers, say returning operations to normal would take months. They have vowed to stay out until the president resigns.

Facing food supply disruptions, Chavez threatened on Friday to send troops to take over food warehouses to guarantee supplies. With some schools closed for the strike, Chavez also pressed parents to demand they open and said teachers who failed to show up for work would be dismissed. His foes condemned both measures as illegal threats.

www.dailytelegraph.news.com.au 12jan03

A BOMB threat forced a Dutch airline KLM flight from Amsterdam to the Netherlands Antilles to divert to Paris, the airline and airport authorities said.

The passengers and crew were evacuated after the flight landed at Paris' Roissy-Charles de Gaulle airport. There, the McDonnell-Douglas MD-11 jet was being searched with police dogs and luggage was being inspected, the Paris Airports authority said.

The plane was flying to the Dutch island of Aruba, in the Caribbean off the north coast of Venezuela.

About half an hour into the flight, a passenger unfolded his table and found a sign that said there was a bomb on board, said Bart Koster, a KLM spokesman.

Charles de Gaulle was the closest airport.

"So far we have no reason to think there really is something on board, but we'll have to await the results of the investigation," he said.

He said the plane was carrying 252 passengers and 13 crew. Paris Airports said there were 273 people aboard. The reason for the discrepancy was not immediately clear.

Crew and passengers were housed in a hotel and the flight was expected to continue on to Aruba tomorrow, he said.

OPEC Ministers Prepare to Avert Shortage VOA News 11 Jan 2003, 20:00 UTC

Saudi Arabia's oil minister says the OPEC cartel will act to prevent disruptions in global petroleum markets, as the possibility of war with Iraq looms and Venezuela's labor unrest continues.

Minister Ali al-Naimi said there will be no shortage and that the price of oil, now at a two-year high above $33 per barrel, will fall after OPEC ministers hold an emergency meeting Sunday in Vienna.

The ministers from OPEC's 11 member nations must determine how much additional crude oil to pump into global markets in order to maintain a price within their target range of $22 to $28 a barrel.

The United States has been urging the cartel to boost production to make up for disruptions in Venezuela's oil exports. In normal times, Venezuela supplies about 13 percent of U.S. oil imports, but those exports have fallen to a virtual standstill during Venezuela's six-week general strike.

Washington is also concerned that potential war against Iraq could cause further disruptions in the global oil supply.

OPEC Holds Emergency Meeting to Discuss Production Increase Melaine Sully - Vienna 11 Jan 2003, 20:32 UTC

OPEC headquarters, ViennaThe Organization of Petroleum Exporting Countries holds an emergency meeting in Vienna Sunday to discuss an increase in the production of crude oil. Delegates from the 11 member nations of OPEC gather for the second time in a month at their Vienna headquarters.

The cartel is expected to increase its official output quota, some officials speculate, by one million, or 1.5 million barrels per day, to make up the shortfall caused by a six-week-old strike in Venezuela, a major supplier to the United States. Saudi Arabia wants a bigger increase, but Algeria and Libya are pressing for a million barrel per day increase, which would represent about a four percent rise over the current output of 23 million barrels per day.

Any increase would become effective from February 1, and would be reviewed at the next regular meeting of the OPEC ministers on March 11.

www.deepikaglobal.com

CARACAS: Opponents of President Hugo Chavez accused the embattled leader of promoting political violence after opposition-led marches in several cities were attacked by radical government supporters.

"It's the leader of the country who is provoking this violence," said Carlos Ortega, president of the Confederation of Venezuelan Workers, the nation's largest and most powerful trade union.

"If we live in democracy, why don't you allow the public to march peacefully?" added Ortega.

Government supporters attacked anti-Chavez marchers in Caracas and outside oil facilities around the country, the latest incidents of political violence in this crisis-stricken South American country of 24 million.

"Chavistas," as the president's backers are called, attacked a rally outside a refinery in Cardon, 270 miles (434 kilometers) east of Caracas, wounding a 40-year-old worker and a 28-year-old demonstrator, said Luis Arends, a civil defense worker.

In Caracas, gunmen fired several shots and threw tear gas at an opposition rally. No one was hurt, and the rally resumed. There were no arrests.

Chavez supporters armed with machetes and sticks also prevented a demonstration at an oil facility in central Carabobo state, Globovision television reported. A minor clash occurred at a plant in Barinas state.

Chavez, a leftist former paratroop commander who was elected in 1998 and re-elected two years later, denies he is fomenting escalating violence. Chavez opponents claim the president's fiery rhetoric incites violent reactions from his most radical backers.

In January 2002, four supporters of Chavez's ruling party were slain in western Zulia state. Nineteen died last year on April 11, when rival marches clashed in downtown Caracas. The bloodshed spurred a coup and Chavez's brief ouster. Loyalists in the military returned him to power on April 14.

Three more citizens were killed, presumably by a lone gunman, at an opposition rallying point on Nov. 6, and two government supporters died of gunshot wounds at a street march last Friday.

Thursday's aggressions occurred as thousands of Venezuelan bank workers stayed home to support a nationwide strike seeking new presidential elections, further weakening the currency as analysts speculate that Chavez's government is running out of money.

The nationwide strike that began Dec. 2 has shut thousands of businesses and brought Venezuela's vital oil industry - once the world's fifth-largest exporter - to a virtual halt. Gas has been imported.

Amid fears of a banking crisis, Venezuelans bought US dollars and sent the bolivar currency to a record low of 1,593 to the dollar - 5 percent weaker than Wednesday and down 12 percent for the year.

Analysts speculated Chavez's government may have to devalue the bolivar to balance its budget. Most government income is in dollars and a weaker bolivar would increase its domestic spending power.

Spokesmen at three of Venezuela's largest banks - Banco de Venezuela, Banco Provincial and Banesco - said 80 percent of the country's nearly 60,000 bank employees stayed home Thursday.

Jose Torres, president of the opposition-aligned Fetrabanca workers union, urged employees to provide only minimal services -such as processing payments for medical emergencies - Thursday and Friday.

But Luis Boris, secretary general of the pro-government bank workers union Sutrabanca, accused bank owners of closing doors without consulting workers.

A nonbinding referendum on Chavez's rule is scheduled for Feb. 2. Chavez insists the constitution only requires him to respect a possible recall referendum in August, the midpoint of his six-year term.

Strike organisers - including leaders of the nation's largest trade union, its business chamber and the state-run oil company -claim their protest is as strong as ever. Many factories, industrial parks and supermarkets remained closed.

But there were signs many are tiring of the strike. There was more traffic on streets and sidewalks and in shops, restaurants and markets.

Efforts by Chavez to jump-start operations at Petroleos de Venezuela S.A., or PDVSA, have been partially successful.

Crude output is estimated at about 400,000 barrels a day, compared with the pre-strike level of 3 million barrels. Exports, normally 2.5 million barrels a day, are at 500,000 barrels a day.

Energy Minister Rafael Ramirez claimed PDVSA will produce 1.5 million barrels a day by next week and will reach full capacity next month. Dissident PDVSA workers doubt production can reach those levels so soon.

sg.biz.yahoo.com Sunday January 12, 4:47 AM By Fred Pals Of DOW JONES NEWSWIRES

VIENNA (Dow Jones)--OPEC members will try to find a compromise Sunday to raise the group's production ceiling by 1 million-1.5 million barrels a day to ease world oil prices, but the current turmoil in Venezuela is likely to be overshadowed by the prospect of an imminent U.S.-led war against Iraq.

ADVERTISEMENT A shortfall in crude output from Venezuela is already covered by other Organization of Petroleum Exporting Counties members pumping in excess of their quotas. It's the consequences of a war with Iraq that is setting nerves jangling, analysts say.

"For how long will Iraqi production be cut off in the case of a war? And what are the implications for the region? These are the issues OPEC has to deal with and look at during this meeting," William Edwards, president of Texas-based Edwards Energy Consultants, said Saturday.

Against such a cloudy outlook, OPEC kingpin Saudi Arabia has moved to reassure the world's oil markets that the group can make up for any shortage. Ali Naimi, Saudi Arabia's Minister of Petroleum & Mineral Resources, on his arrival in Vienna for the meeting, insisted: "There will be no shortage of oil in the market. There will be no missing barrels," The price of crude, he said, should be "less than what it is today."

The Saudi pledge, a timely release of U.S. Strategic Petroleum Reserves and a seasonal downturn in consumption starting in the second quarter will help cool world oil prices, Edwards said. "But I don't expect prices to ease a lot for some time," he added.

Chavez Sends Two Top Officials To Meeting

The Venezuelan problem can't be ignored at this meeting, however. The embattled former paratrooper Chavez understands that and has dispatched a heavyweight delegation featuring both his Oil Minister Rafael Ramirez and the president of state-owned oil monopoly Petroleos de Venezuela (E.PVZ), Ali Rodriguez, a former OPEC Secretary General.

That is to make sure the country gets its share of any quota increase eventually, even though it can't pump any additional oil now, Venezuelan oil ministry sources said.

OPEC needs to get the message from Caracas that Venezuela will return to its production levels of around 3 million b/d pumped before a general strike began 42 days ago, the sources said. Current production is seen at around 400,000 b/d, or even less.

"Venezuela is also crucial. For example, what happens if Venezuelan oil comes back on the market soon?" asked Herman Franssen, president of Washington-based International Energy Associates. But Franssen, as most analysts agree, thinks it will take Venezuela months to get back to previous production levels, if it gets there at all.

While there is little doubt OPEC will decide to boost by 1 million b/d or more over its current 23 million b/d limit, how many new barrels actually hit the market is a different matter, Franssen added. "Everybody except Saudi Arabia and maybe Kuwait is already producing at full capacity. I think we're talking of around 500,000-600,000 barrels of new oil," Franssen said. That may not be enough to cool prices significantly, he added.

OPEC, excluding Iraq and with sharply reduced Venezuelan volumes, pumped 22.6 million in December, according to a recent Dow Jones Newswires survey. Iraqi production has been seen at slightly more than 2 million b/d. Global demand for OPEC output is seen at around 25 million b/d.

Excluding Iraq and Venezuela, OPEC's spare capacity is seen at around 3.5 million b/d with the bulk - around 2.5 million b/d - coming from Saudi Arabia, according to OPEC figures.

Most analysts expect OPEC to agree on the increase, shared equally across its members, excluding Iraq. A temporary allocation of the extra barrels may also be agreed.

But as OPEC President Abdullah bin Hamad Al Attiyah said late Saturday, there's no "magic number" yet.

-By Fred Pals, Dow Jones Newswires; 0043-664-5446851; fred.pals.dowjones.com