www.nytimes.com By JAMES DAO and JUAN FORERO

WASHINGTON, Jan. 24 — Secretary of State Colin L. Powell strongly urged the Venezuelan government and its opposition today to accept one of the two proposals offered by former President Jimmy Carter to end the 54-day-old strike that has filled Venezuela's streets with protesters, shut down businesses and paralyzed its oil industry.

As diplomats in Washington and officials in Caracas reported progress toward ending the impasse, several leaders of the opposition movement said they were prepared to begin negotiating on one of Mr. Carter's proposals — a referendum on President Hugo Chávez's rule.

The opposition's willingness to discuss the August referendum took some officials by surprise. Leaders of the opposition had said recently that they considered August too late. Some officials viewed this softening of their position as an indication that the opposition believes that its strike is losing steam.

In Washington today, the Venezuelan foreign minister, Roy Chaderton, also told reporters he believed the government had begun to break the strike at the state-owned oil company, asserting that oil production is expected to surpass a million barrels a day in the near future. Oil industry analysts have said the government exaggerated oil production during the strike.

Diplomacy to end the impasse moved to the headquarters of the Organization of American States in Washington today, as a new group calling itself the Friends of the Secretary General held its first meeting. The group, which consists of the United States, Mexico, Chile, Brazil, Spain and Portugal, is intended to help César Gaviria, the secretary general of the Organization of American States, broker an agreement.

After a two-hour meeting, the Brazilian foreign minister, Celso Amorim, who was appointed coordinator, said he sensed a willingness on both sides to discuss Mr. Carter's proposals.

"I am more hopeful today than I was yesterday," Mr. Amorim said. "There is a beginning of an interest in the proposals."

In a statement to the friends group, Mr. Powell called Mr. Carter's proposals "the best path for Venezuelans."

"They offer a way out of the current impasse, and it is our job as the Friends of the Secretary General group to urge both sides to agree to one of them," he said.

Mr. Carter offered two proposals on Monday in Caracas. One would be the adoption of a constitutional amendment that would cut the president's term to four years from six, ending Mr. Chávez's term this year and leading to new elections. The second, one Mr. Chávez has publicly said he would support, would lead to a recall referendum in August that would ask people whether Mr. Chávez should be removed from office.

The opposition has long opposed the second proposal, saying August is too far off. But now, with Mr. Chávez's government slowly reactivating the once-moribund oil industry and many Venezuelans questioning the effectiveness of the strike, anti-Chávez leaders say they are open to Mr. Carter's proposals.

What has made the referendum idea more palatable, they say, is that it calls on the government to guarantee that the vote would take place no later than Aug. 19, while offering other assurances.

"With these proposals, we are disposed to negotiating," said Carlos Fernández, leader of the country's most influential business group.

There are still stumbling blocks, though. Opposition leaders said they expected the oil workers and executives who shut down the state oil company, Petróleos de Venezuela, not to be fired or punished. Though the Carter proposal says workers exercising their "labor rights" should not be punished, analysts believe it is unlikely that Mr. Chávez will let top dissident oil executives have their jobs back.

In Washington, Mr. Chaderton refused to say whether the government would offer the workers amnesty. Instead, he complained bitterly about violence by the strikers and the harsh criticism of the Chávez government that dominates many newspapers and television stations.

In a meeting with reporters here, Mr. Chaderton was defiant, saying the Chávez government believed it should serve out its full term, scheduled to last until 2006, and had no plans to assist the opposition in either amending the constitution or scheduling an August referendum.

But he suggested that the government would not block a referendum, if the opposition collects the required signatures on petitions.

The shift in the opposition movement came after several leaders in the organization privately criticized those who insisted on continuing with a strike that has made life miserable for countless Venezuelans. The strongest proponents of the strike include Carlos Ortega, the labor leader, some big businessmen and owners of the steadfastly anti-Chávez media, said several members of the Democratic Coordinator, the leading opposition organization.

"They did not see the strike as an instrument for pressuring, but rather as a goal in and of itself," said Armando Díaz, general secretary of the left-wing Red Flag party and a member of the Coordinator. "We told them, `No government will ever fall because of a general strike.' "

A high-ranking member of the Coordinator said that earlier this month, opposition leaders realized that a February nonbinding referendum on Mr. Chávez's rule would most likely not happen. "So Carter's coming here was welcomed," said the official, who asked to remain anonymous. "Even though it is the same as Chávez's proposal, it was positive because it came from Carter. That means there is hope."

Venezuela's President Reasserts Hard Line Against Strikers  (January 17, 2003)

www.gulf-news.com | | 25-01-2003

Jakarta seeks partner for LNG plant Jakarta - Indonesia's state oil firm Pertamina said yesterday it needed to find a partner soon to build another liquefied natural gas (LNG) plant in East Kalimantan or it would risk losing market share. "We have to start building a new plant this year to fill market (requirements) in 2005.

Therefore, we are seeking a partner," Pertamina downstream director Muchsin Bahar told reporters. "We need around $600 million to build one LNG plant. If we do not build now we will lose market (share) in 2005," he added.

Pertamina announced its plan for the new plant last September, saying its capacity would be around 3 million tonnes. Pertamina has eight LNG plants in the East Kalimantan city of Bontang and four in Arun in northwestern Aceh province with a combined total annual capacity of around 26 million tonnes.

Gazprom sees rise in gas prices Brussels - Russian gas giant Gazprom said yesterday it foresaw gas prices in western Europe increasing in the next few months as a result of continued rises in the world crude oil market.

"Everything leads us to believe that prices will increase," Gazprom's Chief Executive Alexei Miller told reporters after a meeting with a senior official of the EU's transport department, pointing to high oil prices to which gas prices are linked. Miller was in Brussels to discuss possible European investment in a Baltic pipeline project to export Russian gas to the EU.

BPCL profit soars threefold Mumbai - Bharat Petroleum Corp. said third-quarter net income surged threefold per cent after India's third-biggest oil refiner benefited from selling diesel and gasoline at higher prices. Profit in the three months ended September increased to Rs2.33 billion ($49 million) from Rs719 million in the year- ago period.

Bharat Petroleum and other Indian refiners raised fuel rates twice in the quarter to reflect an increase in international crude oil prices. Refiners revise prices twice a month to keep them in line with international crude oil rates. Bharat Petroleum was paid past dues by the government for subsidising cooking fuel, boosting profit. India's oil refiners were forced to sell kerosene and cooking gas at below world prices to the country's poor until March 31. 

IBP three-month profit dives Mumbai - IBP Co, an Indian fuel retailer, said its profit in the three months ended December 31 fell 98 per cent to Rs13.2 million ($275,000). Sales rose 0.7 per cent to Rs21.53 billion. The shares fell Rs15.75, or 6.4 per cent, to Rs232.1 on the Mumbai Stock Exchange.

Kochi Refineries profit rises 65pc Mumbai - Kochi Refineries Ltd, a refinery based in south India, said its profit in the three months ended December 31 rose 65 per cent to Rs269.5 million ($5.6 million). Sales rose 32.7 per cent to Rs21.17 billion. Kochi Refineries shares rose 0.55 paisa, or 1.1 per cent, to Rs49 at 1:02 p.m. India time on the Mumbai Stock Exchange.

ENI begins production at Bhit field Milan - ENI SpA started production at the $236 million Bhit gas field in Pakistan as Europe's fourth- biggest oil company expands in the Asian country following two acquisitions. The field has proven and probable reserves equivalent to 172 million barrels of oil while output is expected to rise to as much as 40,000 barrels a day, ENI said in an e-mailed statement.

ENI, which operates the field, has a 40 per cent stake in it while Royal Dutch/Shell Group holds 28 per cent. Rome-based ENI entered Pakistan through its purchase of two UK rivals, British Borneo Oil & Gas Plc in 2000 and Lasmo Plc a year later. The state-controlled company expects production in the country - including two other gas fields already in production and two being developed - to exceed 50,000 barrels of oil equivalent in 2004, up from 10,000 last year.

PGS sells Atlantis unit for $105m Oslo - Norwegian oilfield services group Petroleum Geo-Services said yesterday it had agreed a long-delayed deal to sell its Atlantis oil unit to Chinese oil trader Sinochem for up to $105 million. Shares in the heavily indebted PGS, hit by weak global demand which has cut into oil drilling, climbed 8.5 per cent to 2.8 Norwegian crowns ($0.404) at 0907 GMT over a flat Oslo benchmark index on relief the deal was finally agreed.

Failure to close the Atlantis sale last year as planned had been a major reason behind the July 2002 collapse of merger talks with U.S. competitor Veritas DGC Inc. PGS said it expected the deal with oil trader China National Chemicals Import & Export Corporation (Sinochem), which had once been estimated to be worth about $200 million, to be finalised by February 20.

Venezuelan exports surge 62pc Caracas - Venezuelan oil exports jumped 62 per cent in the week yesterday to 688,000 bpd, or 25 per cent of capacity, as the government struggled to break a strike in the world's fifth largest exporter, shipping data showed yesterday. The recovery in exports adds weight to reports of rising flows at the wellhead in the Opec member, where a bitter political conflict is being played out in the oil industry, a key supplier to the U.S.

Oil exports stood at 688,000 bpd, up from 424,000 bpd in the previous week, according to information from ship agents and port authorities. Venezuela exported 2.7 million bpd before the strike and exports have averaged 519,000 bpd over the past four weeks.       · Opec can do no more to ease prices · Soaring Asia prices draw supplies from Europe · U.S. cash crudes mixed · Oil Briefs - January 25, 2003 · Asia crude premiums rise  

www.gulf-news.com London |Reuters | 25-01-2003

Steamy fuel oil prices in Asia have pried open the arbitrage from Europe and at the same time drawn a provisional ultra large crude carrier (ULCC) booking from the Caribbean to Singapore, traders said.

Traders said exports from the West to Singapore, which had ground to a near halt in January after the Venezuelan strike ate into U.S. supplies, were slowly starting to take shape as players work to lock in paper profits.

"The east-west spread right now for March is around $27-28 and about $25 for February. Some people are starting to lock this in and look for the right freight and buyers in Asia," said one trader.

The east-west spread was trading at a narrow $5-6, just less than a week ago, but ballooned in the last few days following the twin effect of crumbling prices in northwest Europe and soaring prices in Singapore.

Traders said they have yet to see a January spot fixture from Europe or the Mediterranean to Singapore but most expect something to materialise in the coming days.

"The freight rates from the Med to Singapore are talked at around $20 a tonne, so based to the east-west spread, it is possible to move stuff to Asia," said one trader.

Exports from the region, including the Meditterranean, to Asia totalled almost a million tonnes in December but shipments plunged in January due to a combination of expensive freight and high prices in Europe.

Prices in Europe took off in January after icy weather stalled exports from the Baltic, which were exaggerated by strong demand from across the Atlantic as U.S. refiners looked to the region to cover shorts from Venezuela.

"It looks like the U.S. have covered a lot of their shorts and there's no big demand coming up. So people with excess oil are starting to look to Singapore again," said one trader. Shipping sources said that Swiss-based trader Trafigura had put the 350,000-tonner Berge Pioneer on subject for the trip from the Caribbean to Singapore.

They said the tanker, which was chartered at a cost of $4.5 million or $13 a tonne, would begin loading from refineries around the area in late January.

Traders said this was the probably only the second ULCC to make the long voyage from the Americas to Singapore laden with fuel oil.

They said if the shipment does work out, the cargo would arrive in Asia in time to meet an anticipated surge in Chinese demand following the Lunar New Year Holidays in early February.

Prices in Singapore have risen to over a two-year high with cash bids heard on Thursday at a high of $191 a tonne, compared to trades on the benchmark Rotterdam barge at $168 fob.

english.eastday.com

Two journalists, an American photographer and a British reporter, on assignment for an American newspaper, were kidnapped, Colombian rebels said yesterday in a radio broadcast. Three other foreigners believed abducted were freed late on Thursday.

The two were seized on Tuesday at a rebel roadblock in one of the most violent regions of Colombia. They were led away from their taxi with hoods on their heads, but had been told they were being taken for an encounter with a rebel commander.

Meanwhile, three reporters who were reported missing last Sunday in Panama, just north of the Colombian border, were turned over to church officials on Thursday.

They were reportedly seized by the right-wing United Self-Defense Forces of Colombia last Sunday. One journalist, Robert Pelton, gained worldwide attention with an interview of American Taliban suspect John Walker Lindh while covering the war in Afghanistan for CNN.

The rebel said the journalists were being held and "in due time, they will be freed, when the political and military conditions permit."

The kidnapping occurred 330 kilometers northeast of Bogota. Several dozen U.S. special forces are to be stationed at an army base in the area, located near Venezuela.

The rebels claimed the two journalists had arrived in the guerrilla stronghold without their permission.

"You must take into account that Arauca state has been declared a war zone by the U.S. and Colombia," the rebels said. "For that reason, the National Liberation Army is (acting) in the defense of the dignity of all the people of eastern Colombia."

The country is one of the most dangerous in the world to work in, but local journalists have been the ones usually targeted.

(The Associated Press)

sg.biz.yahoo.com Saturday January 25, 7:35 AM By Stephen Parker Of DOW JONES NEWSWIRES

NEW YORK (Dow Jones)--Venezuela's oil production has climbed to nearly 1 million barrels a day, with oil exports reaching roughly half that amount as the country's general strike continues, Fitch Ratings analysts said Friday.

The strike, which began Dec. 2, throttled back the major oil producer's output and exports during much of the last two months. While the government has restored oil production to roughly 900,000 to 920,000 b/d, the lack of foreign oil tankers has impeded exports - now seen at roughly 500,000 b/d - as serious safety and insurance issues linger, Fitch analysts said in a conference call.

Venezuela's troubles have reverberated throughout the world, with international oil companies losing production revenue and U.S. refiners seeing profits curbed by higher crude costs. Even after the conflict is resolved, Venezuela will face a raft of challenges in rebuilding its oil industry, analysts and consultants said.

"The crisis in Venezuela has created one of the largest shocks in the history of the oil market, exceeding the anticipated disruption resulting from a war with Iraq," Goldman Sachs analysts said in a report this week. "So far, the outage in Venezuela has cost the market nearly 110 million barrels."

The top 10 international oil companies with operations in Venezuela are losing a combined $6.7 million a day in net revenue because of the strike, the Wood Mackenzie energy consultancy estimated this week.

Among those companies hardest hit are TotalFinaElf (TFE), which is losing around $1.4 million a day; ConocoPhillips (COP), with losses of about $1 million a day; ENI SpA (E), losing $870,000 a day; ExxonMobil (XOM), losing $770,000 a day; and ChevronTexaco Corp. (CVX), losing $640,000 a day, Wood Mackenzie said.

Many U.S. refiners - particularly those on the East and Gulf coasts - have also seen refining profit margins shrink as heavy crude supplies are limited and oil prices soar on the shortfall, Fitch analyst Bryan Caviness said.

"Venezuela will continue to put a strain on refiners," Caviness said, citing the 45-day transit time for increased Saudi oil exports to reach U.S. shores.

The additional Middle Eastern supplies include lighter- and medium-grade crudes, which don't have the same economic advantages as heavier Venezuelan crude, Caviness said.

With U.S. crude inventories at critically low levels, Goldman Sachs said refiners are faced with a dilemma. They'll have to cut production beyond the normal season decline, which could cause problems in the gasoline market this summer, or they'll likely need a release of national Strategic Petroleum Reserves oil to avoid stock-outs, shortages and price spikes.

Venezuelan President Hugo Chavez's government and opposition leaders have agreed the country's oil production is rising, but they differ widely on the amount.

As reported, dissident staff of Petroleos de Venezuela, or PdVSA, estimated Friday that crude oil output had risen to 855,000 b/d, mainly due to an increase in the eastern part of the country.

Chavez said Sunday he expected output to reach about 2 million b/d by the end of this month.

"There's significant disinformation and misinformation taking place in Venezuela," Fitch analyst Alejandro Bertuol said. "Most oil-related activities remain hindered."

Even as Venezuela gradually increases its production, the massive U.S. military buildup in the Middle East is seen helping to keep oil prices above $30/bbl, Caviness said.

Oil prices closed $1.03 higher at $33.28/bbl Friday on the New York Mercantile Exchange. Traders and analysts said the rally was sparked by fears that a war with Iraq could substantially disrupt Persian Gulf oil exports, and supported by continuing unrest in Venezula.

Once Venezuela's strike is over, reactivating wells and bringing output back to levels approaching the roughly 2.6 million b/d produced in the final months of 2002 will present many challenges. Venezuela is likely to struggle as its hydrocarbon industry experiences a loss of highly trained workers, Bertuol said.

The situation could be a boon for foreign oil-services companies, however, as they're likely to find remedial work opportunities in Venezuela, said Fitch analyst Patrick McGeever.

Even so, the International Energy Agency, which coordinates use of the industrialized world's strategic oil reserves, estimates Venezuela may have permanently lost 400,000 b/d of production capacity because of the strike. The IEA also warned this month that Venezuela's oil production would take months to come back on stream and faces a "period of decline."

In the short term, PdVSA performance and reliability will remain casualties of the political crisis, Fitch analysts said.

"Systemic roots of the current political crisis will make it difficult to recover market confidence," Bertuol said.

Over the medium term, Venezuela is expected to remain an important player in the global oil market, but the strike will result in major spending reductions, particularly for Venezuelan natural gas and petrochemicals projects, Fitch analysts said.

-By Stephen Parker, Dow Jones Newswires; 201-938-4426; stephen.parker@dowjones.com