www.forbes.com Reuters, 01.13.03, 8:46 AM ET     By John Chiahemen

LAGOS, Jan 13 (Reuters) - Multinationals producing Nigeria's oil said on Monday they were primed to immediately boost production after OPEC's agreement to raise the cartel's output ceiling to stave off a global price shock.

Oil companies in Nigeria have been complaining for months about production curbs of the Organisation of Petroleum Exporting Countries, which came after they had invested hundreds of millions of dollars in new Nigerian fields.

The Nigerian unit of Royal Dutch/Shell <RD.AS><SHEL.L>, the country's top producer, said it expected to add output from its new EA oilfield following OPEC's decision on Sunday to raise quotas for its 10 members.

"We have extra capacity from a number of oil wells not yet put into operation," Shell Nigeria spokesman Don Boham said.

"The EA is a new offshore project which we started slowly, but which we intend to prime up," he said.

But being a new well, it could take a few months for oil to flow significantly from there, he added.

Shell said the shallow water EA came on stream last month but was only producing at a fraction of its capacity of about 140,000 barrels per day (bpd).

Shell is operator of the field with state-run Nigerian National Petroleum Corp (NNPC), France's TotalFinaElf <TOTF.PA> and Italy's Agip <ENI.MI> as shareholders.

Shell said earlier this month its crude output in December rose to its highest level for the year at 845,000 bpd.

The multinational, which accounts for almost half of Nigeria's crude production, saw its output fall in the first half of 2002 to an average of around 660,000 bpd due to Nigeria's stringent OPEC compliance.

But output rose steadily in the second half after the country loosened its grip on compliance.

Other fields due to come on stream in Nigeria this year include two in the country's promising new deep sea frontier. Agip is expected to tap first oil from its Abo deep offshore field next month while TotalFinaElf should start production from its 125,000 bpd Amenam field around June.

SHARE OUT In the quotas shared out in Vienna on Sunday to stem a price spike threatened by a strike in Venezuela and war in Iraq, Nigeria was allocated an additional 124,000 bpd to bring its quota to 2.018 million bpd.

A senior official at ChevronTexaco (nyse: CVX - news - people) Nigeria said the U.S. major did not need to bring on any additional capacity to take advantage of an increased output share.

"We're way under capacity," the official said, quoting a figure of between 80,000 and 100,000 bpd below capacity.

A spokesman for ExxonMobil (nyse: XOM - news - people) said Nigeria's second largest producer had the capacity to raise output beyond its assigned 365,000 bpd.

The NNPC will assign new output figures to its foreign joint venture partners over the next few days based on its assessment of their capacities, oil company officials said.

Although production capacities of the oil companies are monitored by NAPIMS, NNPC's investment arm, industry sources say higher quotas are still subject to intense lobbying at the state company's headquarters in Abuja.

"I am sure everybody will be there lobbying for new quotas," one company official told Reuters.

sg.biz.yahoo.com Monday January 13, 9:19 PM

CARACAS -(Dow Jones)- Venezuelan President Hugo Chavez said over the weekend that he'd punish striking locally owned bank Banesco (E.BNS) by withdrawing all military funds deposited in the bank.

Military deposits make up about 10% of Banesco's 2.4 trillion bolivars ($1=VEB1,513.25) in deposits, the bank's president, Juan Escotet, said in a televised interview.

Banesco, Venezuela's fourth largest bank, has a market share of about 11.3%, according to the Banking Superintendent.

ADVERTISEMENT Escotet said he hoped to meet with Chavez and work the problem out.

Meanwhile, the Banking Superintendent said it's opening "administrative procedures" against all banks that are ignoring its order to maintain normal operating hours between 8:30 A.M. (1230 GMT) and 3:30 P.M.

Banks have mostly been open just three hours a day in support of a 43-day-old general strike against Chavez's leadership, and many shut completely Thursday and Friday but reopened with the restricted hours Monday.

Other local banks include subsidiaries of Citigroup Inc.'s (C) Citibank and Spanish conglomerates Banco Santander Central Hispano SA (STD) and Banco Bilbao Vizcaya Argentaria SA (BBV).

Opposition leaders are demanding that Chavez agree to call elections in 30 days if he loses a Feb. 2 nonbinding vote on whether he should remain president.

Chavez has thus far maintained the constitution only requires him to accept the results of a possible recall referendum next August, the midpoint of his term.

Chavez's critics blame his left-leaning policies for country's deepening economic crisis with a likely 8% contraction in 2002, amid 17% unemployment, and 31% annualized inflation sparked by a 46% devaluation of the bolivar.

Chavez has said the problems are due to an "economic coup" led by his opponents.

-By Jehan Senaratna, Dow Jones Newswires; 58212 564 1339; jehan.senaratna@dowjones.com

www.heraldsun.news.com.au

President Hugo Chavez has threatened to revoke the broadcasting licences of Venezuela's main television and radio stations, accusing them of supporting opposition efforts to overthrow him through a six-week-old strike. The threat came as Venezuelan troops fired teargas to drive back tens of thousands of anti-government protesters.

Yesterday Mr Chavez said the stations were abusing their power by constantly broadcasting opposition advertisements promoting the strike.

The strike has dried up oil revenue in the world's fifth biggest oil exporting country but hasn't rattled the President's resolve to stay in power.

Venezuela's main TV stations have not broadcast any advertisements during the strike except the opposition ads.

Media owners have said they adopted that stance because Mr Chavez incited his supporters to attack reporters.

The oil producers' organisation OPEC has agreed to increase production to try to stabilise the price of oil.

www.alertnet.org 13 Jan 2003 13:17

By Karen Iley

BASEL, Switzerland, Jan 13 (Reuters) - Central banks need to watch the situation in Iraq closely and be prepared to act to stop any war torpedoing a modest world economic pickup in 2003, Bank of England Governor Sir Edward George said on Monday.

The central bankers still see the United States leading the global recovery, with Europe and Japan growing at a slower pace, he told reporters after chairing a bimonthly meeting of his colleagues at the Bank for International Settlements here.

"The general sense of the discussion was that we are seeing a relatively slow but relatively steady growth in the world economy through this year, likely to pick up as we move through the year and this is the central expectation," he said.

"It was true of the United States, certainly it is true of the eurozone, (which is) picking up gradually and heading back to trend in the latter part of the year, the trend being somewhat lower than the States," he said.

He said Japan would grow "pretty modestly" in 2003.

But with the world braced for war in the Middle East should Washington lead an attack on Iraq, which it accuses of hiding weapons of mass destruction, George said central bankers could not let down their guard and let growth falter.

"I think the message is that we will need to be extremely vigilant and be prepared to respond if the risks begin to crystallise," he said.

Central bankers did not discuss growth forecasts in detail, but broadly stuck to their September view that U.S. growth could approach three pecent and the eurozone could expand around two percent by the end of this year.

George said they also did not look at currencies or the oil market in detail at the meeting, which included officials from the U.S. Federal Reserve, the European Central Bank and the Bank of Japan.

Last week European Central Bank (ECB) President Wim Duisenberg said the risks to growth had increased in the last month, raising the chances of more interest rate cuts from the current rate of 2.75 percent.

ECB Vice President Lucas Papademos told a Greek paper at the weekend that the ECB stood ready to help the euro zone recovery if the current economic weakness dragged on despite last month's growth-bolstering half point interest rate cut.

In the United States, where the benchmark federal funds rate is at a four-decade low of 1.25 percent, President George Bush last week unveiled a $670 billion 10-year tax cut plan in the hope of boosting spending and investment.

But hopes that the U.S. economy would resume its role as the world's business locomotive suffered a setback on Friday with surprise news the economy had shed 101,000 jobs in December.

The news helped drive the dollar to three-year lows against the euro and a four-year nadir against the Swiss franc.

Oil prices also remain a concern to both growth and inflation, having soared 25 percent in the last two months to touch two-year highs because of the export halt in strikebound Venezuela and fears of further shortages in an Iraq war.

Oil prices eased after OPEC agreed at the weekend to lift output by 1.5 million barrels per day, a move dealers called too little, too late to bolster U.S. fuel inventories soon.

A protracted war in Iraq that undermines business and consumer confidence and pushes up oil prices, dampening spending, also poses a serious risk to the general economic outlook.

www.upi.com From the Business & Economics Desk Published 1/13/2003 8:46 AM View printer-friendly version

Here is a look at Monday's top business stories: -0- Profits decline at Levi Strauss

SAN FRANCISCO, Jan. 13 (UPI) -- Levi Strauss & Co., one of the world's largest apparel makers, said it posted sharply lower quarterly profits despite slightly higher sales.

The privately held company reported a fiscal fourth-quarter net profit for the period ended Nov. 24 of $45 million compared with a profit of $63 million during the same period a year ago.

Gross profit was $502 million, or 39.9 percent of sales, versus $506 million, or 41.0 percent of sales, a year earlier.

Revenue at Levi Strauss, which reports earnings because of its outstanding corporate debt, rose 1 percent to $1.26 billion on a constant-currency basis and up 2 percent on a reported basis.

In a separate statement, Levi Strauss said it had agreed to sell $50 million of 12 1/4-percent senior notes to AIG Global Investment Corp. or an affiliate. The company said it lowered its debt by $111 million in 2002.

Phil Marineau, chief executive officer, said, "We ended 2002 right where we planned. We stabilized sales in the second half of the year, with revenue growth in the third and fourth quarters. Our business turnaround strategies are succeeding worldwide. Market-leading product innovation, strong retail and marketing programs, and improved execution are driving better performance. We are ready to grow again in 2003.

"Throughout the year, we expect to continue expanding our reach to a broad range of consumers, including the fast growing women's market, by offering relevant products at a wide range of price points," he said.

"Our big news as we enter spring 2003 is the global rollout of Levi's Type 1 jeans, a modern interpretation of the quintessential Levi's jeans. They'll be featured in this month's Super Bowl ad. And, in mid-summer, we launch our new Levi Strauss Signature brand in Wal-Mart stores in the United States," Marineau added.

-0-

German industrial output rises

BERLIN, Jan. 13 (UPI) -- German industrial output rose in November, boosted by strong capital goods output and higher production within the construction sector.

Industrial production rose a seasonally adjusted 2.5 percent during the month, the economics ministry said in its preliminary report. That follows a 1.3-percent decline in October. The data was much stronger than analysts' expectations of a 0.50-percent rise for the month.

The ministry attributed the rise in November output to a 3.8-percent monthly rise in the construction sector, adding to a 1.5-percent rise the month before, and a 2.6-percent increase in the manufacturing sector, up from a 1.7-percent decline during the previous month.

The rise in the manufacturing sector was led by a 4.1-percent increase in capital goods and a 1.8-percent rise in producer goods, the ministry said.

In western Germany, industrial output rose 2.7 percent during the month, while in eastern Germany it increased 0.4 percent during November.

-0-

Stocks rise in Asia

HONG KONG, Jan. 13 (UPI) -- Stock prices ended higher in moderate trading Monday on the Hong Kong Stock Exchange, lifted by strength in China-related issues.

Markets in Japan were closed for a public holiday. Trading will resume on Tuesday with the Nikkei Stock Average hovering around 8,470.45 after losing 27.48 points Friday.

Hong Kong's blue-chip Hang Seng Index, which rose 46.09 points during the previous session, jumped 112.58 points, or 1.2 percent, to 9,834.08. Analysts said Hong Kong stocks were lifted as investors acquired an appetite for China-linked issues amid the uncertain global outlook.

Worries about rising tensions in North Korea after it pulled out of a global nuclear arms treaty seemed to be abating and some traders said the likelihood of a U.S.-led war on Iraq was also already priced into the market.

In trading, Legend Holdings jumped 5.3 percent as China's largest personal computer maker is expected to benefit from rising domestic consumer demand and growing affluence.

China's largest refiner, Sinopec Corp., jumped 4.2 percent after brokers at JP Morgan upgraded the stock.

China's largest offshore oil producer CNOOC Ltd. rose 1 percent, China's largest oil and gas producer PetroChina rose 0.6 percent and Chinese piped gas distributor Xinao Gas Holdings surged 5.8 percent.

Elsewhere, stocks ended higher on the South Korean Stock Exchange, lifted by strength in oil stocks. The Korea Composite Stock Price Index, or Kospi, which fell 2.04 points during the previous session, gained 19.52 points, or 3.1 percent, to 648.06. Analysts said the market was supported by strength in oil-related stocks after OPEC agreed to raise output over the weekend.

OPEC agreed to increase crude production by 1.5 million barrels a day in a bid to lower prices and offset shortages resulting from a strike in Venezuela.

The market also drew support from developments over the weekend to ease the crisis in North Korea. Former U.S. Ambassador to the United Nations Bill Richardson said Sunday that North Korea was ready to negotiate directly with the United States about its nuclear weapons programs. Speaking on ABC's "This Week," Richardson -- who just completed three days of talks with North Korean diplomats -- said he thinks the (Bush) administration needs to "just pick up the phone" and get preliminary talks at the U.N. started at a low level to set up broader talks to address the issues.

In trading, stocks of companies that benefit from cheaper fuel costs rose. Korea Electric Power climbed 1.4 percent and Korea Gas jumped 9.3 percent. POSCO, the world's second-largest steel maker, jumped 6.4 percent ahead of its fourth quarter earnings this week and Korean Air, Korea's flagship carrier, surged 7.1 percent on hopes the OPEC decision will ease its fuel costs.

Prices on the Taiwan Stock Exchange rose to their highest level in more than five months. The key Weighted Index, which rose 37.07 points during the previous session, jumped 140.41 points, or 2.9 percent, to 4,991.26 on hopes for renewed technology spending in the United States.

In trading, Taiwan Semiconductor Manufacturing Co., the world's largest contract chip maker, surged the daily 7-percent trading limit.

Singapore stocks ended higher for the fourth consecutive session in moderate trading. The key Straits Times Index, which rose 12.08 points during the previous session, rose 38.88 points, or 2.9 percent, to 1,386.05.

In trading, the world's third-largest contract chip maker, Chartered Semiconductor jumped 8 percent.

Prices ended slightly higher in light trading on the Australian Stock Exchange. The blue-chip All Ordinaries Index, which slipped 0.60 points during the previous session, rose 7.40 points, or 0.2 percent, to 3,042.50.

Market heavyweight News Corp. rose 1.8 percent, Australia's dominant telecommunications carrier Telstra Corp. rose 1 percent while Rio Tinto eased 1 percent.