www.quicken.com Tuesday, January 28, 2003 03:00 PM ET  Printer-friendly version   NEW YORK (Dow Jones)--Valero Energy Corp. (VLO, news) said Tuesday that despite its improved sour crude oil discount in fourth quarter 2002, crude oil throughput at its 12 refineries was down by approximately 10% of capacity, and could be reduced by another 5% if crude oil and other feedstock costs remain high.

Valero's chariman and chief executive officer Bill Greehey said that while refining margins in the Northeast and Gulf Coast were at seasonally average levels, sweet crude oil and intermediate processing economics remained unfavorable and resulted in the 10% to 15% reduction in throughput rates.

The company's fourth-quarter sour crude oil discount increased by 25% from weak third-quarter levels, mostly due to increased production by members of the Organization of Petroleum Exporting Countries (OPEC, news) throughout the quarter, and contributed approximately $25 million in additional operating income versus the third quarter.

The company expects the increased availability of sour crudes to further widen the discount in February and March.

Valero's non-West Coast refining margins improved from third-quarter levels mostly due to lower refined product inventories, strong refined product demand and market concerns over supply disruptions related to the oil workers' strike in Venezuela.

The company expects refined product margins to continue to improve through 2003.

Greehey said the strike resulted in increased demand for U.S. products from Latin American countries and Venezuela. He said Valero sold eight product cargos to Latin American countries since the strike began.

West Coast refining margins remained weak throughout the fourth quarter on high inventory and production levels, Greehey said.

"Looking forward," Greehey said "we expect the combination of extremely low crude oil inventories, high feedstock costs and the upcoming heavy turnaround season to result in lower refined product output leading to significant declines in refined product inventories and higher refined product margins."

Valero has a relatively light schedule of maintenance turnarounds planned for 2003, compared with a heavy schedule in 2002.

"We will be up and running when a lot of other capacity will be down," Greehey said.

In first quarter 2003, approximately 800,000 barrels-a-day of crude processing capacity and 900,000 b/d of conversion unit capacity will be down for maintenance, he added.

Valero has planned plant-wide turnaround maintenance at its 85,000 b/d Ardmore, Okla., refinery beginning in late-March and ending by mid-April.

West Coast refining margins will also improve in 2003 due to reduced CARB gasoline production by some refiners as a result of the mandatory switch to ethanol blending from MTBE blending.

Valero said its switch to CARB Phase III ethanol blending and the completion of the alkylation unit expansion at the Benicia, Calif., refinery were on schedule for the end of the year.

"We see no (CARB gasoline) production reductions. Our production will stay flat," Greehey said.

By Rose Marton, Dow Jones Newswires; 201-938-2059, rose.marton@dowjones.com

www.alertnet.org

(Writes through with rebel announcement) By Ibon Villelabeitia

BOGOTA, Colombia, Jan 28 (Reuters) - Marxist rebels said on Tuesday they would release in the next two days a British reporter and a U.S. photographer they kidnapped last week in a war-torn stretch of eastern Colombia.

"They will be released in the next few days, in one or two days," Antonio Garcia, a commander of the Cuban-inspired National Liberation Army, or ELN, told RCN radio, adding the two were in "good health."

British reporter Ruth Morris and U.S. photographer Scott Dalton were traveling on a freelance assignment for the Los Angeles Times along a rural road in the violent province of Arauca when they were stopped at a rebel roadblock and spirited away on Jan. 21.

Garcia did not give details of the planned release but said the ELN was coordinating with the Los Angeles Times. "There is a critical combat situation in the area but the will and the decision of the ELN is to release them in the coming days."

Colombia is torn by a four-decade-old war that pits leftist rebels against right-wing paramilitaries and the U.S.-backed military. It is one of the world's most dangerous places for reporters, and eight Colombian journalists were killed last year.

Speaking from an undisclosed location, Garcia said Morris was given an opportunity to broadcast a birthday greeting to her father on Monday over an ELN clandestine radio station.

Reuters obtained a partial transcript of the broadcast Tuesday, in which Morris is briefly interviewed by a man who identifies himself as a member of the ELN's Domingo Lain unit.

The man said the release will take place "as soon as security conditions permit it."

"First of all, let's go on with an interview with the journalists, a U.S. photographer, and a British journalist for the Los Angeles Times," the man says in a crackling broadcast.

"Good afternoon. This is Ruth Morris."

"Do you copy?," the man's voice asks.

"Yes I copy," Morris answers.

The communication with Morris then becomes inaudible. Dalton is not heard in the conversation.

FARC FREE TV CREW

Garcia's interview came just as rebels of the larger Revolutionary Armed Forces of Colombia, known as "FARC," released unharmed a five-man Colombian television crew they had kidnapped on Sunday, also in Arauca province.

The RCN Television crew had traveled to Arauca to cover the kidnapping of Morris and Dalton and the region's deteriorating security when they were snatched by the FARC. RCN said rebels took the crew's equipment, including a satellite telephone.

Arauca, an oil-rich region of savannas and swamps bordering Venezuela, is one of the most violent zones in a war that kills thousands every year. Suspected rebels Sunday killed six soldiers after detonating the fourth car bomb in a month.

Morris and Dalton, both experienced hands in Colombia, were stopped at an ELN roadblock, hooded and taken to a secret guerrilla camp, said their driver, who was later released.

A group of 70 U.S. Special Forces personnel are in Arauca to train local troops counterinsurgency techniques to protect an oil pipeline from frequent rebel attacks. The pipeline serves U.S.-based oil company Occidental Petroleum.

In a clandestine radio broadcast last week, the 5,000-strong ELN said it was demanding unspecified "political and military conditions" for the release of Morris and Dalton.

In an interview with Reuters in April, the ELN's commander in Arauca said the United States would become the "biggest enemy in our political and military struggle" if Washington sent the troops to Arauca. The commander, identified as Pablo, never mentioned kidnapping journalists, however.

The Cuban-inspired ELN kidnaps hundreds of people every year for ransom money to pay for their struggle, which they say is to impose socialist reform in a country torn by the divide between rich and poor. The war kills thousands every year.

www.bangkokpost.com

Washington has shown itself to be more than resolute on Iraq, but not so those countries so ready to condemn its actions.

DOUG BANDOW

`We will not take part in a military intervention in Iraq,'' German Chancellor Gerhard Schroeder has said. Whether his government will oppose war when the UN Security Council votes is less clear, though he has promised not to ``agree to a resolution that legitimises war''.

France also offers resolute ambiguity, threatening but not promising a veto. French Foreign Minister Dominique de Villepin plans to use the summit of European Union foreign ministers to build a coalition against war.

Yet Washington doubts that its critics are serious. US Secretary of State Colin Powell said he hoped ``the French will come to the understanding of the need for such a strategy''. That is, he expects Paris to give in as it always does.

Even the refusal of Nato to approve America's request for assistance is seen as temporary. Defense Secretary Donald Rumsfeld dismissed the problem as one of ``old Europe'', asserting that most European nations were with the US.

America has heard tough talk from its allies before. Last autumn, in fact.

Mr Schroeder won re-election by running against the Bush administration's plan for war in Iraq, but later promised to send German troops to Turkey to crew Awacs planes sent by Nato. Paris similarly criticised the US, but subsequently agreed to the Security Council resolution demanded by Washington.

Nor is that all. Over the years, Washington has learned that it can browbeat and bully most nations into submission on most issues. America's critics are paper tigers.

The inspectors' positive assessment of Iraqi cooperation merely delays a showdown over Iraq. Still, that debate will give war opponents another chance to block Washington. But simple criticism, whether from angry demonstrators or frustrated diplomats, will not dissuade the Bush administration from attacking Iraq. Concrete practical steps are needed.

First, US allies must look after their own interests. For instance, South Korea and Japan are understandably focused on the prospect of North Korea restarting its nuclear programme. But war in Iraq makes war in Korea more likely.

Although President George W. Bush has proclaimed his pacific intentions in the peninsula, no one should take him at his word. Once the conquest of Iraq is complete, there will be rising demands within and without the administration for military action against the North. At that point, opposition by Seoul and Tokyo may be too little too late.

Australia has strongly backed the Bush administration. Yet war against Iraq, by creating additional Muslim grievances and encouraging the use and transfer of whatever weapons of mass destruction Baghdad possesses, increases the likelihood of a future, more devastating, Bali-like bombing. Countries ranging from Thailand to Taiwan also could be affected.

Second, France must do more than bluster. Only by vetoing any UN war resolution can France hope to stop the Bush administration's war plans. And only by making a commitment and sticking to it will Paris be able to encourage China and Russia to join it.

A veto by two or three of the Security Council's permanent members, supported by the negative votes of Germany and perhaps other states, would demonstrate a shocking lack of international support.

Third, Germany's Mr Schroeder must prove that opposition to Washington is more than a cheap election stunt. The administration, appropriately, has nothing but disdain for a supposed ally that offers criticism while yielding on substantive issues.

Put bluntly, the US doesn't need Berlin's approval if the Schroeder government nevertheless allows unfettered American use of German airspace, permits Washington to shift forces from bases in Germany, and even mans Awacs planes supporting the war. If the chancellor believes Washington's Iraq policy to be misguided, even dangerous, he must say so _ and vote against any Security Council resolution, bar the use of German troops in any fashion, and deny Washington use of German airspace and bases.

Fourth, France and Germany must encourage other governments to join with them. No single nation is likely to face down the globe's hyper-power. But a veto by three nations is easier to sustain than a veto by one. A protest by several European states carries more weight than criticism by one or two. An opposition that included Pakistan and Syria _ like Germany, temporary members of the Security Council _ as well as India and several Asian states would be more impressive still.

Fifth, if America's critics, especially Berlin and Paris, aspire to greater international influence, they should encourage Jordan, Saudi Arabia and Turkey, where a new government faces a public that oppose war by a nine-to-one margin, to stand firm against any war. A little bridge-building with Ankara would be particularly useful, given the perceived snub over EU membership.

Sixth, the British Labour party must say no to war in its name. Prime Minister Tony Blair is supporting Bush administration policies, but this will not be Tony Blair's war. It will be the Labour government's war.

Verbal criticism by backbenchers matters little. A public revolt before any vote might force the prime minister, who has already temporised by urging that the inspectors be given more time, to withdraw his unconditional support for Washington.

Lastly, other governments must warn Washington that they will not bail it out after any war. Almost all analysts believe that the occupation will be more difficult than the invasion. The Bush administration is counting on European nations to furnish many of the tens of thousands of troops who will be needed for years to preserve some pretence of order among Baathists, Kurds, Shiites and returning emigres. Berlin, Paris and others should tell the US that not only will this be its war, it will be its peace.

If, instead, war opponents back down after publicly criticising American policy, they will reinforce the justifiable contempt in which they are held in Washington. Retreat now and war opponents ensure that US administrations will continue to ignore them in foreign crises. And they encourage the American government to believe not only that what Washington says goes but what Washington says other nations will eventually, if reluctantly, obey. And who could blame US policymakers for doing so?

The credibility of Washington's critics is at stake. If nations like Germany and France give in _ especially if they end up voting for and give military support to the Bush administration _ after taking such strong positions, they will feed Washington's conviction that it can impose its will without constraint.

The Iraq process will inevitably repeat, with North Korea or Iran the next military target, or with a plan for coercive ``regime change'' in Saudi Arabia or Venezuela, or perhaps to forcibly disarm Pakistan.

It will be difficult to stop Washington's rush to war. But united foreign opposition offers the only hope of doing so. Denied the fig-leaf of UN approval, aid from Nato, and use of bases in neighbouring Middle Eastern states, Washington would truly have to go it alone. And do so in the face of opposition from many of the globe's most important players.

That might change President Bush's mind. Other nations can play a leading role in shaping policy towards Iraq. If they are truly serious about doing so.

*Doug Bandow is a senior fellow at the Cato Institute in Washington. He is a former special assistant to President Ronald Reagan and visiting fellow at the Heritage Foundation and author and editor of several books.

www.vheadline.com Posted: Tuesday, January 28, 2003 - 1:44:01 PM By: Patrick J. O'Donoghue

Opposition Asamblea de Educacion group , which has been acting as coordinating committee for private and public sector schools that joined the national stoppage, is recommending a return to classes. The group’s director, Leonardo Carvajal admits that many private schools have re-opened their doors because of pressure from parents and representatives.

• The National Private Education Association has called on members to start classes on Monday, February 3.

According to Carvajal, Universidad Central de Venezuela (UCV), Andres Bello Catholic University (UCAB) and the Caracas Teachers Training Institute are scheduled to re-open next week.  He concludes that there doesn’t seem much point to continue the stoppage now that the consultative referendum has been called off and that any future elections will take time to organize.

The Asamblea de Education, Carvajal adds, will be monitoring possible retaliations against teachers and professors, who joined the national stoppage… “we will defend teachers’ labor rights and we are asking that the issue be placed on the opposition negotiating team’s agenda.”

www.vheadline.com Posted: Tuesday, January 28, 2003 - 1:48:24 PM By: Patrick J. O'Donoghue

There were a reported 83 homicides throughout Venezuela last weekend, according to the Police Detective Branch (CICPC).

• 40 violent deaths took place in Caracas with Libertador Municipality, as usual and despite Mayor Freddy Bernal, taking the lead with 28 murders compared to Sucre (8), and Baruta (4).

In the provinces, 43 murders were reported with 10 in Zulia, 8 in Carabobo, 8 in Aragua and 5 in Anzoategui.

According to the CICPC body count, 25% of the deaths occurred in shootouts with the police … 18 deaths were attributed to settling of scores and 10 to victims resisting mugging.