www.tuscaloosanews.com By MONTE HAYES Associated Press Writer January 14, 2003

Lucio Gutierrez, a cashiered army colonel and former coup leader, didn't wait until he takes office Wednesday as Ecuador's new president to seek a showdown with what he calls a corrupt political establishment.

But his first forays, including a failed attempt to gain control of Congress, have left him bruised and looking inept.

Gutierrez has been forced to back down from a series of demands and threats, and to apologize publicly for declaring the country's ex-presidents should be in jail for their responsibility in "the national disaster."

In the days before he assumes power, Gutierrez has also been accused of an authoritarian streak, bringing comparisons to Venezuelan President Hugo Chavez, the former paratrooper and coup leader whose leftist rhetoric has divided Venezuela and led to growing political instability.

"I think they are different personalities but their political plans are not so different," said Benjamin Ortiz, head of a Quito think tank. "His goal is to accumulate political power and if he achieves it, it will be a beginning similar to that of Chavez, who began with popular referendums."

Gutierrez, frequently referred to simply as "the Colonel," thrust himself into the national spotlight three years ago when he led a group of disgruntled junior army officers and 5,000 Indian protesters in an uprising that drove the highly unpopular Jamil Mahuad from power amid the country's worst economic crisis in decades.

Gutierrez, 45, won an election runoff in November on pledges to bring an end to corruption.

He promised to reduce the number of lawmakers, eliminate political party influence over the court system and extradite bankers implicated in a 1999 collapse of the banking system. He plans to call popular referendums to achieve his reforms.

"I am going to govern the country. I am chief of state and those who prevent Ecuador from advancing, well, we'll do it over their heads," he said. "I will call the people to march and Lucio Gutierrez will be at the head. The country has to change, whatever the cost."

Gutierrez's woes began last week when he reacted angrily after he failed to negotiate an agreement with opposition parties that would have given him control of the 100-member Congress. Gutierrez's political coalition has only 17 seats.

He declared he would not take the oath of office in Congress but in front of "the people" in another forum. But when told the constitution required the oath be taken in Congress and that his vice president would be sworn in as president instead, Gutierrez backed down.

He then threatened not to accept the presidential banner from the Congress president, whose election he questioned as unconstitutional, before again backing down.

"He has no political experience and isn't familiar with constitutional norms, the mechanisms of negotiation," said Simon Pachano, a political scientist. "He is showing the authoritarian spirit of a military man. He is chief of the executive branch. He can't give orders to Congress."

Besides insulting the country's nine former presidents in a newspaper interview Sunday, Gutierrez took special aim at former President Leon Febres Cordero, who as head of the country's largest party, the Social Christians, is probably the most powerful political figure in Ecuador, except for the president. Gutierrez called him "one of the most destructive men in the country."

Responding in a a statement, Febres Cordero said "Gutierrez's declarations...demonstrate his lack of democratic spirit."

"Until now, Col. Gutierrez has been characterized by his contradictions, by his declarations and denials, which reveal a confused and disorienting personality."

Gutierrez also has worried Ecuadoreans with reported plans to force out the top 27 officers in the army, air force and navy so he can choose members of the joint military command from younger officers who served with him. News reports of the plan provoked a public protest from the military command.

"He has made mistakes with the generals, he has made mistakes with the ex-presidents, his reforms are unsustainable," Ortiz said. "He has spent a good part of his political capital before beginning to govern."

www.forbes.com Reuters, 01.14.03, 1:30 PM ET By Pascal Fletcher

CARACAS, Venezuela (Reuters) - Venezuelan President Hugo Chavez's government said Tuesday it would survive a six-week-old opposition strike -- which it dismissed as "fiction" -- and insisted it aimed to rule until the end of its term in 2007.

Vice President Jose Vicente Rangel told reporters the government had no intention of holding early elections demanded by organizers of the strike that has crippled oil output and shipments by the world's No. 5 petroleum exporter.

The uncompromising stance dimmed hopes for a quick negotiated settlement to Venezuela's economic and political crisis, which has jolted world oil markets and stirred efforts by the international community to try to mediate a solution.

Rangel said the government's objective was to rule until the end of the left-winger Chavez's term in early 2007, although he said the constitution allowed for a binding referendum on the presidential mandate after Aug. 19.

"We have no interest in Chavez leaving office," Rangel said in a briefing to foreign correspondents.

"In conditions of violence, it is very difficult for a country to hold elections," Rangel said, urging opponents to be patient and wait for the binding referendum after August.

The opposition, which has reinforced the strike that started on Dec. 2 with almost daily street protests, is demanding Chavez resign and call immediate elections. It has vowed to continue the shutdown until he does so.

"We are maintaining the civic strike," anti-Chavez union leader Manuel Cova told reporters.

In a bid to break the deadlock, the United States and other countries are moving to set up a "friendly nations" group to back efforts by the Organization of American States to broker an agreement on elections between Chavez and his foes. Prior to the strike, the United States imported about 13 percent of its oil from Venezuela.

The Venezuelan leader was due to discuss his country's crisis in New York Thursday with U.N. Secretary-General Kofi Annan after attending the inauguration in Quito Wednesday of Ecuador's new president, Lucio Gutierrez.

Rangel denied that the opposition strike, which has also closed many private businesses and caused shortages of gasoline and some food items, had created chaos in South America's biggest oil producer.

"I don't share this idea of chaos. The country is working," the vice president said. He described the general strike launched by foes as "fiction," saying its organizers were "obsessed" with the idea of trying to force Chavez from power.

But he condemned the oil industry disruption, which has cost the country $4 billion in lost revenue, as "sabotage" and "terrorism." The government has fired 2,000 striking state oil employees and is struggling to restore the industry to normal.

The Venezuela crisis has helped push oil prices to two-year highs of over $30 a barrel as the market frets over supplies at a time when the United States is preparing for a possible war in Iraq.

GOVERNMENT VOWS CRACKDOWN Chavez, a former paratrooper elected in 1998, six years after leading a coup attempt, and who survived a coup in April, accuses his foes of trying to destroy his self-styled "revolution" aimed at helping the poor. Most Venezuelans live in poverty despite the nation's oil wealth.

Opponents, who include business and union leaders, striking oil executives and dissident military officers, say Chavez is trying to install a Cuban-style communist system.

Rangel, repeating warnings by Chavez on the weekend, said the government would not let the strikers disrupt law and order or essential services such as education, banking, food supplies and transportation. "We are going to apply the law to the letter, without (declaring) a state of emergency," he said.

Chavez, who has purged the armed forces since April and now seems to have their backing, has sent troops to help restart strike-hit oil facilities. He has threatened to do the same with schools, banks and factories that refuse to operate.

Rangel poured cold water on opposition hopes to hold a nonbinding referendum on Chavez's rule on Feb 2.

The government has appealed to the Supreme Court against the referendum, which Rangel dismissed as "unconstitutional and "politically useless." He added the government would respect whatever decision the court reached on the issue.

Chavez has said he will not resign even if he massively loses the nonbinding February referendum.

Early Tuesday, troops in Caracas seized arms from the metropolitan police serving under anti-Chavez Mayor Alfredo Pena. Last October, the government took over the city force, but was ordered to return it to Pena by the Supreme Court.

Rangel defended the arms seizures, saying the police were responsible for shooting Chavez supporters in clashes involving pro- and anti-government demonstrators in recent months. The opposition blames armed government followers for the violence.

reuters.com Tue January 14, 2003 01:32 PM ET By Pascal Fletcher

CARACAS, Venezuela (Reuters) - Venezuelan President Hugo Chavez's government said on Tuesday it would survive a six-week-old opposition strike -- which it dismissed as "fiction" -- and insisted it aimed to rule until the end of its term in 2007.

Vice President Jose Vicente Rangel told reporters the government had no intention of holding early elections demanded by organizers of the strike that has crippled oil output and shipments by the world's No. 5 petroleum exporter.

The uncompromising stance dimmed hopes for a quick negotiated settlement to Venezuela's economic and political crisis, which has jolted world oil markets and stirred efforts by the international community to try to mediate a solution.

Rangel said the government's objective was to rule until the end of the left-winger Chavez's term in early 2007, although he said the constitution allowed for a binding referendum on the presidential mandate after Aug. 19.

"We have no interest in Chavez leaving office," Rangel said in a briefing to foreign correspondents.

"In conditions of violence, it is very difficult for a country to hold elections," Rangel said, urging opponents to be patient and wait for the binding referendum after August.

The opposition, which has reinforced the strike that started on Dec. 2 with almost daily street protests, is demanding Chavez resign and call immediate elections. It has vowed to continue the shutdown until he does so.

"We are maintaining the civic strike," anti-Chavez union leader Manuel Cova told reporters.

In a bid to break the deadlock, the United States and other countries are moving to set up a "friendly nations" group to back efforts by the Organization of American States to broker an agreement on elections between Chavez and his foes. Prior to the strike, the United States imported about 13 percent of its oil from Venezuela.

The Venezuelan leader was due to discuss his country's crisis in New York on Thursday with U.N. Secretary-General Kofi Annan after attending the inauguration in Quito on Wednesday of Ecuador's new president, Lucio Gutierrez.

Rangel denied that the opposition strike, which has also closed many private businesses and caused shortages of gasoline and some food items, had created chaos in South America's biggest oil producer.

"I don't share this idea of chaos. The country is working," the vice president said. He described the general strike launched by foes as "fiction," saying its organizers were "obsessed" with the idea of trying to force Chavez from power.

But he condemned the oil industry disruption, which has cost the country $4 billion in lost revenue, as "sabotage" and "terrorism." The government has fired 2,000 striking state oil employees and is struggling to restore the industry to normal.

The Venezuela crisis has helped push oil prices to two-year highs of over $30 a barrel as the market frets over supplies at a time when the United States is preparing for a possible war in Iraq.

GOVERNMENT VOWS CRACKDOWN

Chavez, a former paratrooper elected in 1998, six years after leading a coup attempt, and who survived a coup in April, accuses his foes of trying to destroy his self-styled "revolution" aimed at helping the poor. Most Venezuelans live in poverty despite the nation's oil wealth.

Opponents, who include business and union leaders, striking oil executives and dissident military officers, say Chavez is trying to install a Cuban-style communist system.

Rangel, repeating warnings by Chavez on the weekend, said the government would not let the strikers disrupt law and order or essential services such as education, banking, food supplies and transportation. "We are going to apply the law to the letter, without (declaring) a state of emergency," he said.

Chavez, who has purged the armed forces since April and now seems to have their backing, has sent troops to help restart strike-hit oil facilities. He has threatened to do the same with schools, banks and factories that refuse to operate.

Rangel poured cold water on opposition hopes to hold a nonbinding referendum on Chavez's rule on Feb 2.

The government has appealed to the Supreme Court against the referendum, which Rangel dismissed as "unconstitutional and "politically useless." He added the government would respect whatever decision the court reached on the issue.

Chavez has said he will not resign even if he massively loses the nonbinding February referendum.

Early on Tuesday, troops in Caracas seized arms from the metropolitan police serving under anti-Chavez Mayor Alfredo Pena. Last October, the government took over the city force, but was ordered to return it to Pena by the Supreme Court.

Rangel defended the arms seizures, saying the police were responsible for shooting Chavez supporters in clashes involving pro- and anti-government demonstrators in recent months. The opposition blames armed government followers for the violence.

ogj.pennnet.com DATE: January 14, 2003 FROM: PR Newswire COPYRIGHT: Copyright © 2003 PR Newswire Association LLC. All rights reserved.

LYONDELL-CITGO Refining LP Expects Return to Near-Normal Operating Rates During February

HOUSTON, Jan. 13 /PRNewswire-FirstCall/ -- Lyondell Chemical Company (NYSE:LYO) today announced that operating rates at LYONDELL-CITGO Refining LP (LCR) are increasing. After temporarily limiting operations to approximately 50 percent in late December and early January, LCR expects to increase rates and have both of its distillation units in operation within the next week. LCR is a joint venture between Lyondell and CITGO Petroleum Corporation.

Since the strike in Venezuela disrupted regular contracted shipments, LCR has maintained operations by processing crude oil from a combination of sources, including shipments from Venezuela, purchases on the spot market and inventories on hand. Prior to the strike, LCR was receiving its full contract supply (230,000 barrels per day) of Venezuelan crude oil from PDVSA (Petroleos de Venezuela, S.A.). LCR's total refining capacity is 268,000 barrels per day.

"We're pleased that shipments to LCR are now increasing and that LCR has successfully plotted a course that we expect will take it to near-full rates over the next month," said Morris Gelb, Lyondell's Executive Vice President and Chief Operating Officer. "During this time, our highest priorities continue to be safety and operational excellence at our facilities."

LCR put contingency plans in place prior to the beginning of the Venezuelan strike. Recently the refinery temporarily postponed several discretionary projects, leading to a short-term reduction in the number of contract workers at the facility. No permanent LCR employee positions have been affected. LCR will continue to monitor the situation in Venezuela and will make any necessary adjustments to operations based on delivery logistics and available information.

Lyondell Chemical Company, (www.lyondell.com ), headquartered in Houston, Texas, is a leading producer of propylene oxide (PO), propylene glycol (PG) and other PO derivatives such as butanediol (BDO) and propylene glycol ether (PGE). Lyondell also is the world's number three supplier of toluene diisocyanate (TDI) and a producer of styrene monomer and MTBE as co-products of PO production. Through its 70.5% interest in Equistar Chemicals, LP, Lyondell also is one of the largest producers of ethylene, propylene and polyethylene in North America, as well as a leading producer of polypropylene, ethylene oxide, ethylene glycol, high value-added specialty polymers and polymeric powder. Through its 58.75% interest in LYONDELL-CITGO Refining LP, Lyondell is one of the largest refiners in the United States, processing extra heavy Venezuelan crude oil to produce gasoline, low sulfur diesel and jet fuel.

Source: Lyondell Chemical Company

CONTACT: media, Anne M. Knisely, +1-713-309-2643, or investors, Douglas J. Pike, +1-713-309-7141, both of Lyondell Chemical Company

www.yomiuri.co.jp Takao Kuroi Yomiuri Shimbun Correspondent

This is the ninth in a series of articles on international security issues facing the United States and the rest of the world.

On Dec. 20 and 21 in Washington, 11 Iraqis working in the oil industry and living outside Iraq gathered for a meeting hosted by the U.S. State Department to discuss the future of Iraqi crude oil and energy.

Details of what was discussed at the meeting, and even the list of attendees and the meeting's locale, have not been disclosed by the department.

Though the U.S. government has remained silent as to the goal of the meeting, people associated with the oil industry have said Washington's decision to hold the conference reflects its desire to gain a greater say in Iraqi oil exports by cooperating even more closely with Iraqi dissidents, in the belief the government of Iraqi President Saddam Hussein will collapse sooner or later.

Iraq has 112 billion barrels of oil in reserves, the second-largest reserves in the world after Saudi Arabia. But under U.N. economic sanctions, Baghdad now is allowed to export crude oil only to purchase humanitarian supplies, such as food and medicine.

If crude oil from Iraq is released into worldwide markets, the supply-and-demand relationship will change and oil prices will drop quickly.

In that event, the price-controlling power of the Organization of Petroleum Exporting Countries, which has dominated the global oil market, will be weakened dramatically, resulting in the "democratization of the oil market" sought by the United States.

In addition, if the United States can gain rights to Iraqi oil, Washington's influence on oil markets will increase drastically.

Though the U.S. government has denied the allegation, many in the oil industry hold the deep-rooted opinion that the purpose of the anticipated attack on Iraq is securing U.S. crude oil interests there.

The United States and OPEC leader Saudi Arabia share a special relationship, under which Saudi Arabia stabilizes oil prices and the United States protects the country from invasion by other nations, according to Joe Barnes, a research fellow at the Baker Institute for Public Policy at Rice University in Houston.

The relationship has stabilized crude oil prices since the 1980s, working as the engine for world economic growth.

However, the situation changed completely after the Sept. 11, 2001, terrorist attacks on the United States.

Because many of the attackers came from Saudi Arabia, hard-liners in the United States after the attacks argued even more strongly that Saudi Arabia was the United States' real enemy.

In Saudi Arabia also, anti-U.S. sentiment grew amid increasing social anxiety about various domestic problems, such as the rising unemployment rate. This sentiment was evident in the Saudi refusal to provide bases to U.S. forces in the event of an attack on Iraq.

There are lingering rumors that Saudi plutocrats are withdrawing funds from the United States.

At the end of the summer, people working in crude oil markets circulated the rumor that Nigeria would secede from OPEC to comply with the wishes of Washington.

Nigeria has actively developed its oil fields with investment from U.S.-affiliated major oil companies, and conflicts of opinion have surfaced between the African country and Saudi Arabia.

Though both the U.S. and Nigerian governments denied the speculation, an official of a Japanese company in Nigeria said, "The controversy over Nigeria's secession is a U.S. trick to estrange OPEC members."

OPEC on Sunday decided to increase crude oil output by 1.5 million barrels per day, partly because of the current general strike in Venezuela, to promote its control of the global oil market.

But the United States has been making careful preparations to reassert the control it enjoyed during the golden years of its major oil companies.

As if in inverse proportion to cooling relations between the United States and Saudi Arabia, Washington and Moscow have been warming up recently.

Russia is now the world's second-largest oil producer, due to efforts by Russian President Vladimir Putin's administration to increase oil output.

In early October, the first U.S.-Russia Energy Summit was held in Houston, the home turf of U.S. President George W. Bush.

Energy ministers and top officials of more than 100 oil and gas companies from the two countries gathered to exchange opinions about crude oil exports from Russia to the United States and expanding U.S. investment in Russia.

At a U.S.-Russia summit meeting in November in St. Petersburg, the two leaders issued a joint declaration promoting energy development cooperation by the public and private sectors, indicating the countries are still in the honeymoon phase of their relationship.

For the United States, which consumes a large volume of energy, lowering the nation's dependence on OPEC, which exports about half the oil consumed in the United States, is an urgent task also from the viewpoint of national security.

Also for Russia, which relies on exports of oil and gas for about 40 percent of its federal fiscal revenue, increasing crude oil exports by inviting U.S. investment is crucial to economic growth.

Many people believe a "gentleman's agreement" with the United States was behind Russia's vote in favor of a U.N. Security Council resolution on inspections of weapons of mass destruction in Iraq, though Moscow has opposed attacks on Iraq and urged the early lifting of economic sanctions against Baghdad.

Observers say the agreement guarantees that the United States will respect Russia's economic interests in Iraq after the collapse of Saddam's government, in exchange for Russia providing a stable crude oil supply to the market.

However, it is uncertain whether the cooperative relationship between Washington and Moscow will continue unchanged.

A Russian political source with extensive knowledge of the oil industry openly expressed his distrust of Washington, describing an incident in December as "a plot by the United States."

The incident in question involved the Iraqi government notifying Lukoil, Russia's largest oil company, that its contract to develop a Iraqi oil field had been canceled.

In general, the reason for the contract cancellation was believed to have been Russia's decision to vote for the Security Council resolution on weapons inspections in Iraq.

But the Russian political source said the real reason was that Lukoil executives had contacted the Iraqi dissidents who were being wooed by the U.S. oil industry.

Russia, along with China and France, has negotiated with the Saddam administration against the wishes of the United States, and gained rights to develop oil fields and other interests in Iraq.

Therefore, Moscow is concerned over whether Washington, which targets oil interests in Iraq, really will respect Russian economic interests in the Middle Eastern country.

The interests of Russian oil producers are not necessarily the same as those of the U.S. government, which hopes to lower crude oil prices.

The cost of drilling for crude oil in Russia is about 7 dollars per barrel, much higher than the 3 dollars to 4 dollars average for drilling crude in the Middle East.

For the Russian government, which assembles the national budget on the premise crude oil will be priced at 21.50 dollars per barrel, the current price, which hovers at about 30 dollars per barrel, is "comfortable," a source in the Japanese oil industry said.

If the full-scale development of Iraqi oil fields begins and crude oil prices drop, Russia's fiscal condition would worsen drastically.

If the situation weakens the power base of the Putin administration, which has adopted a cooperative policy concerning the United States, it could result in an unstable political situation and a resurgence of regional conflicts and terrorist acts.

In this case the United States finally will have to pay the price for its policies, in the form of a new war with terrorists.

Leonidas Drollas, chief economist at the Center for Global Energy Studies, said the very survival of a cartel organization such as OPEC in the current oil market has become difficult.

The United States faces a challenging task in terms of building a new order to replace the old in the world oil market.