sg.biz.yahoo.com Monday January 27, 4:02 PM

The top 10 oil companies operating in Venezuela are losing nearly $7 million a day because of a sharp decline in Venezuelan oil production. For most of them, that's a small price for what is proving to be a financial bonanza, Monday's Wall Street Journal reported.

Venezuela's prolonged strike has helped push oil prices to more than $30 a barrel and resulted in production increases for several member nations of the Organization of Petroleum Exporting Countries, where many of the same companies operate. Since the amount of oil major companies produce in Venezuela is a tiny fraction of their overall production, they are benefiting along with virtually every other oil producer in the world. One exception: Petroleos de Venezuela SA, Venezuela's national oil company.

"Oil companies are crying all the way to the bank," said Fadel Gheit, an analyst at Fahnestock & Co.

Earnings among major oil companies for the fourth quarter of 2002, to be released this week, are expected to be 51% higher than a year earlier, in part because of Venezuela's turmoil, according to Bruce Lanni, an analyst at A.G. Edwards Inc. Exploration and production profit at ChevronTexaco Corp., whose 120,000-barrel-a-day production in Venezuela has been roughly halved, are expected to triple, Mr. Lanni said. The reason: robust prices in addition to merger savings.

"We had to shut all of our production," said an official at BP PLC, which produces almost 50,000 barrels a day in Venezuela. "But the financial loss was more than offset by the rise in the world price of oil."

Oil prices have risen more than 20% since the Dec. 2 start of a strike aimed at forcing Venezuelan President Hugo Chavez from office. Industry analysts attribute some of the rise in price to growing concern about a possible war with Iraq, another major oil producer, and cold weather. But they say the primary driver has been Venezuela, adding as much as $6 a barrel to the price of oil.

On Friday the U.S. benchmark settled $1.03 higher at $33.28 a barrel on the New York Mercantile Exchange. European Brent rose 77 cents, closing at $30.49 on the London Petroleum Exchange.

Wall Street Journal Staff Reporters Bhushan Bahree and Thaddeus Herrick contributed to this report.

www.miami.com Posted on Mon, Jan. 27, 2003

CARACAS - (AP) -- President Hugo Chávez said Sunday he would put in place price and currency controls as Venezuela's economy heads for a tailspin stemming from an opposition strike, which entered its ninth week today.

''So that these [currency] controls do not hurt the poor, we will institute price controls,'' Chávez said in Porto Alegre, Brazil, at the World Social Forum. He did not give details of the controls.

Hundreds of thousands of his foes occupied a central Caracas highway for the entire weekend to protest a Supreme Court decision suspending a Feb. 2 referendum on Chávez's rule.

After extending the protest well beyond the 24 hours planned, protesters finally rolled up their national flags -- and, in many cases, their tents -- and let traffic flow again.

Opposition leaders said that, instead of the referendum, they would collect signatures Feb. 2 petitioning for Chávez to resign, for his term to be cut and for pro-Chávez lawmakers to be replaced.

Chávez suspended foreign currency dealings for five business days last Wednesday to halt the rush of nervous Venezuelans trading in their bolivars for dollars.

The currency has lost 25 percent of its value this year alone.

On Sunday, he said he will soon propose a tax on all financial transactions in Venezuela, saying it would be ''a kind of Tobin tax.'' Tobin taxes, named after Yale University economist and Nobel-laureate James Tobin, are designed to tame currency market volatility.

Chávez did not provide more details, but said Venezuela's dollar-based reserves dropped $3 billion in December and January as a national strike dried up oil exports. Dollars are needed to buy food -- about half of which is imported -- medicines and other essentials, some of which already are in short supply.

Chávez also said Sunday that oil production has risen to 1.32 million barrels a day. But dissident oil executives put the figure at about 957,000 barrels.

www.heraldtribune.com By FABIOLA SANCHEZ Associated Press Writer

A two-month strike against President Hugo Chavez showed signs of waning Monday as oil production rose and opposition leaders said schools, restaurants and malls may reopen.

Crude oil output reached 966,000 barrels a day Monday according to striking executives at the state oil monopoly, Petroleos de Venezuela S.A., or PDVSA. That amount is just under a third of Venezuela's prestrike production but well up from a low of 200,000 during the strike. Chavez claimed Sunday that daily production had surpassed 1 million barrels.

But the opposition said the strike in the oil industry, which provides half of government revenue, would continue despite government efforts to lift production.

Citing political unrest and economic turmoil, a coalition of business groups, labor unions and political parties launched the strike Dec. 2 to demand that Chavez resign or call early elections.

They began organizing a nonbinding referendum on Chavez's presidency. But Venezuela's Supreme Court last week postponed indefinitely the Feb. 2 vote, citing a technicality.

Instead, they now plan to collect signatures Feb. 2 on a petition demanding Chavez's term be cut to pave the way for new elections.

A petition - with 15 percent of Venezuela's 12 million voters - is necessary to amend the constitution, cutting Chavez's six-year term, due to run until 2007, to four.

Strike leaders, however, were concerned that frustration with long gas lines and shortages of basic goods could weaken their cause.

Julio Brazon, president of the Consecomercio business chamber that represents 450,000 businesses, said shopping malls and food and other franchises may be allowed to open part-time next week.

The National Association of Private Education, which represents 911 private schools, called assemblies this week to decide whether schools should open Feb. 3. School was supposed to start Jan. 7.

Chavez's government, meanwhile, was able to raise oil production to 966,000 barrels per day Monday, according to striking executives at the state oil monopoly.

The government claims most of the monopoly's 40,000 workers are back on the job. Strike leaders deny it and say the government has lifted production by focusing on newer oil fields, where crude is easier to extract.

The strike has cost Venezuela - the world's fifth-largest oil producer - at least $4 billion, according to government estimates.

The economy could contract by as much as 40 percent in the first quarter of 2003, the Santander Central Hispano investment bank has warned.

As the strike entered its ninth week, Chavez's government was preparing to impose currency exchange controls this week to limit the amount of foreign currencies Venezuelans can buy and stem a run on the bolivar, which has lost a quarter of its value this year.

With the apparent support of the armed forces, Chavez, a former paratroop commander who staged an unsuccessful coup bid in 1992, has fired almost 3,000 strikers from the oil monopoly, PDVSA.

He has sent soldiers to seize tankers piloted by striking crews and to confiscate soft drinks from two private bottling plants.

A waning strike could give Chavez more muscle in negotiations with the opposition sponsored by the Organization of American States. The main point of discussion is whether to hold early presidential elections.

Chavez was elected in 1998 and re-elected in 2000. A binding referendum on Chavez's presidency can be held only midway through his term, which would be in August.

The Caracas stock exchange resumed trading Monday for the first time since the strike began. It will open 2-1/2 hours each day to continue showing support for the strike, bourse officials said.

www.billingsgazette.com

CAMARILLO, Calif. (AP) - Gas prices rose nearly one and a half cents per gallon over the past two weeks, an industry analyst said Sunday.

The average weighted price for gas nationwide, including all grades and taxes, was about $1.52 per gallon Friday, according to the Lundberg Survey of 8,000 sta-tions nationwide. Gas cost just over $1.50 a gallon on Jan. 3, the date of the last Lundberg Survey.

Contributing to the price rise was the continuing oil production strike in Venezuela, a fear of war against Iraq, the intense cold weather on America's East Coast, which is prompting some refiners to produce more heating oil, and the addi-tion of a costlier gasoline additive in California, Trilby Lundberg said.

California is phasing out the use of methyl tertiary butyl ether, or MTBE, an addi-tive that is blamed for pollut-ing drinking water after it leaked from storage tanks. Some refineries are beginning to replace it with ethanol, a corn-based fuel additive that is more expensive but better for the environment. , Lundberg said.

That has increased prices in California, which in turn pushed up the nationwide price average, Lundberg said.

Federal law requires gasoline to contain a 2 percent oxygen additive - such as MTBE or ethanol - to cut down on air pollution. The national weighted average price of gasoline, including taxes, at self-serve pumps Friday was about $1.49 per gallon for regular, $1.58 for mid-grade and $1.67 for premium.

europe.cnn.com Monday, January 27, 2003 Posted: 1117 GMT SPECIAL REPORT

SINGAPORE (Reuters) -- Oil prices stayed on an upward track on Monday, awaiting a key report from U.N. weapons inspectors for a signal of the likelihood of war in Iraq.

Just hours before chief weapons inspector Hans Blix was due to brief the U.N. Security Council, Washington made it clear it was ready to attack Iraq alone if needed, while Britain said Baghdad was hiding banned weapons, spying on arms inspectors and hindering their movements.

U.S. light crude rose 21 cents to $33.49 a barrel, extending Friday's gains of more than $1 in New York.

Brokers said oil markets were likely to be volatile with several potential price-moving events diaried in the next five days.

Blix, in charge of chemical, biological and ballistic weapons teams, and Mohamed ElBaradei, in charge of nuclear arms teams, will submit on Monday their first full report to the U.N. Security Council on Baghdad's 12,000-page weapons declaration and Iraq's cooperation with arms inspectors.

U.S. President George W. Bush will to make a State of Union address on Tuesday and is due to meet key ally Britain's Prime Minister Tony Blair later this week. Britain has sent thousands of troops to join a U.S. military build-up in the Gulf.

"Each of these stages will provide further clarity and we can expect a timetable to war to become a little clearer," said Sydney-based independent oil analyst Simon Games-Thomas.

"It's a busy week and all it will take is a couple of words of moderation and we could see prices really come off, it's that volatile," said Games-Thomas.

U.S. secretary of State Colin Powell said at the weekend that time was running out for Baghdad to disarm voluntarily.

"We will not shrink from war if that is the only way to rid Iraq of its weapons of mass destruction," Powell said at the World Economic Forum (WEF) in Davos, Switzerland.

Saudi Arabia sees no oil shortage

The world's biggest oil producer, Saudi Arabia, signalled at the weekend that it was not planning to raise supplies any further despite fears that war in the oil-rich Middle East could lead to a supply crunch and a spike in crude prices.

Benchmark oil prices are running close to two-year highs on concerns that an attack on Iraq might coincide with the ongoing strike in Venezuela, which has strangled oil exports from the world's fifth-biggest exporter.

"There is no shortage in the market and there should be no reason for prices where they are today," Saudi Oil Minister Ali al-Naimi told a panel at the WEF.

The Organisation of the Petroleum Exporting Countries agreed in December to raise output by 1.5 million barrels per day to counter some of the shortfall due to the opposition-led strike in Venezuela.

"What can we do more? I do not agree there is a lack of oil," OPEC Secretary-General Alvaro Silva also said at the forum. "The problem of the price is the threat of war."

Venezuela's President Hugo Chavez hinted at the weekend that he may be forced to take up arms if he were defeated by the opposition movement, which is calling for Chavez to step down.

Venezuelan crude output has recovered from lows in December when it was running at a trickle of about 150,000 bpd against more than three million bpd before the strike, which started on December 2.

Strikers said on Sunday that crude output was about 986,000 bpd, 30 percent of pre-strike levels, while Chavez claimed production had reached 1.32 million bpd.