money.cnn.com February 2, 2003: 1:34 PM EST

ABU DHABI, United Arab Emirates (Reuters) - OPEC is already gearing up to fend off an oil price collapse that might follow any U.S. assault on major Gulf producer Iraq.

Although world oil prices have shot well past $30 a barrel amid war fever and political turmoil in OPEC member Venezuela, key oil ministers are warning that markets could tip into oversupply during the second quarter and spark a price crash.

"If there is danger of a glut, we have to meet and rectify the situation. Definitely we (OPEC) are concerned about the second quarter," UAE Oil Minister Obaid bin Saif al-Nasseri told reporters Sunday at an energy and environment conference.

"Typically there is less demand then, and I hope this increase or the change of the ceiling won't affect it so badly."

Nasseri was referring to a decision by the Organization of the Petroleum Exporting Countries to increase supplies by 1.5 million barrels per day (bpd) to 24.5 million bpd from Feb. 1 to cover an export shortfall from strike-bound Venezuela.

Lead OPEC producer Saudi Arabia said oil markets were not starved of crude now and vowed that the cartel would keep pumping enough oil to meet its higher output limit.

"I can assure you that we, Saudi Arabia, will make sure that 24.5 million bpd is delivered," said Oil Minister Ali al-Naimi.

But higher volumes from the exporter group may only set the stage for a sharp decline in prices during the second quarter, which typically sees a seasonal drop in demand of about two million bpd due to warmer weather in the Northern Hemisphere.

"It seems everybody now is producing above the market requirements to make the market cool," said Libyan Oil Minister Abdulhafidh Zlitni. "Supplies are sufficient... and the build up of stocks will have a negative impact on prices, certainly."

Oil market analysts share the ministers' expectation of lower prices. A Reuters poll of analysts projects that world oil prices, now at two-year highs, are set to slump by $10 a barrel in the second half of the year after any war against Iraq. No panic

In the event of a military assault, OPEC President Abdullah al-Attiyah and UAE's Nasseri expected a price spike at the start of action followed by a decline when it starts to wind down.

"I believe there will be no panic. Any price spike would be brief," said Attiyah, also oil minister of Qatar. "I don't believe some analysts who say prices will reach $100, or $60."

The OPEC chief predicted a particularly grim outlook from April if exports in fellow member Venezuela are fully restored.

"If Venezuela comes back (to full capacity), we could have four million bpd or more floating," he said, adding the excess could be at least three million bpd based on its current output.

If that proves the case and "there are signs in March that prices are falling sharply," Libya's Zlitni said OPEC could reduce supplies at its March 11 meeting.

Given Washington's military preparations in the Gulf, the OPEC meeting -- which is expected to focus on the state of world stockpiles -- could take place against the backdrop of an attack on Iraq, the world's eighth-biggest oil exporter.

In a bid to calm market fears of supply disruptions, Naimi insisted Saudi Arabia would be prepared, if needed, to make use of its excess capacity, which he pegged at 2-2.5 million bpd.

Industry sources say the kingdom, the world's biggest oil exporter, is now pumping close to 9 million bpd and Naimi has made clear Riyadh can raise that to 10 million within weeks.

The Saudi oil minister said OPEC stood ready to make up for any supply shortages on its own without major consuming countries having to release their emergency stockpiles.

But the oil minister of the UAE, the only other OPEC member with substantial excess capacity, was less confident of the cartel's ability to plug a gap in Iraqi supplies. Iraq is now selling some two million bpd of crude.

"If there is total disruption to oil production in Iraq, OPEC would find it very difficult in a short period to replace that reduction of production," Nasseri said.

His assessment might spook oil dealers fretting over a potential supply crunch. Global inventories are running on the low side, particularly in the United States due to the Venezuela strike, but Saudi's Naimi said they would soon be replenished.

"With Venezuela returning and supplies steaming to the U.S., we will see a gradual build in inventories," he said.  

www.vheadline.com Posted: Sunday, February 02, 2003 - 1:39:14 AM By: Miguel Salazar

Salazar: 50 million a day set aside for Coordinadora Democratica

Slaves: last November people found it strange when the Interior & Justice (MIJ) Minister appointed a new Passport & Identification (Oni-Dex) board … a lieutenant colonel and a lawyer linked to the old ID system in the golden age of the Fourth Republic have made an art out of legalizing Chinese and Arabs from tourist to transit visas. Where are the 560 Chinese who entered Venezuela in December as tourists and were given Oni-Dex ID cards. Where did the “overtime” money go? Is it true or false that they were connected through a finance company run by a former mayor and Caracas State Governor to finance sabotage program during the national stoppage? Three Oni-Dex offices registered and granted the ID cards. At the Petare Office 429 ID cards were granted to Chinese citizens, who arrived with only a tourist visa. At the La Trinidad office 86 ID cards and at the Valencia II office 78 ID cards. On handing over their tourist visas, each applicant was charged 3 million bolivares, not including travel costs. The ID card was more expensive and then there were “laundered” stamps to pay for. The operation is estimated at a little more that $2 million. It all started at the Venezuelan Consulate in Hong Kong where the visas were granted while the Oni-Dex general director took care of authorizing and supplying the ID cards. What is more serious is that the new ID card holders are unusually illegals. It’s amazing that 429 ID cards were rushed through in one day at one office and signed in record time. Are we witnessing a new form of slavery? These people are under the care of those who brought them in. Not to mention the illegal entry of Arabs legalized at Propatria Oni-Dex office.

Black Cat: Slowly but surely, a new military commotion is getting underway.

Briefcase: An average 50 million bolivares a day have been placed to cover Coordinadora Democratica (CD) costs.

Who’s paying? After more than 2 months of the “military operation” that turned Plaza Francia (Altamira) into “liberated territory,” there are few rooms at night at the Four Seasons Hotel, which was on the verge of closing down before the military action. Top brass rebels only appear in the Plaza tent for press conferences. Meanwhile, it’s a mystery to find out who paid hotel lodgings, even though it is presumed that a lot of money was paid out. BTW, a sector of the Cuban exile is angry over the “mislaying” of funds to pay for rebel costs.

Golf: Some time ago I complained about Intesa-SAIC relationship and the damage it was doing to the country. The history of deals between former Petroleos de Venezuela (PDVSA) executives isn’t exemplary … they depreciated PDVSA. The outsourcing company directed the computing raid and was represented in Venezuela by Pablo Orsolani. SAIC can count on elite IC pensioners. There is a site under investigation for links to sects and cults, which are just beginning to gain ground among the high classes of industrialized classes. Before the stoppage, an exchange of views took place between Intesa-SAIC and top executives linked to the outsourcing on the Caracas golf courses.

Politicians in the service of foreign commerce: Gente del Petroleo sepoys have been making incursions into Judibana (Falcon) Amuay company employees compound. In true Ku Klux Klan style, they harass worker’s families, arriving in cavalcades of luxury cars and cruise around the compound, murmuring unintelligible things and pinning things on doors and windows.

One Chavez Frias: In my next book shortly to be published I write: How can one deny that Chavez Frias is a faithful exponent of Accion Democratica (AD) founder, President Romulo Betancourt’s (1960-1964) conduct. Like Chavez Frias, Romulo was a political warlord who made politics an instrument to his own image and likeness and created a kind of Venezuelan, called the Adeco (Accion Democratica). The paradigm died when Betancourt went. The King is dead! Long Live the King! The Chavist was born with the arrival of Chavez Frias. But what an extraordinary similarity between an Adeco and a Chavist!

www.vheadline.com Posted: Sunday, February 02, 2003 - 1:55:04 PM By: Oscar Heck

VHeadline.com commentarist Oscar Heck writes: These words come from the mouth of a close friend of mine living in the Caracas barrio (slum) where I find myself at this time.

A few days ago, he and his extended family, had been interviewed by a Canadian CBC reporter (and cameraman) and with a reporter from Denmark. At their request, one member of the family escorted each for day trips through the barrio ... they interviewed and filmed throughout a good portion of the barrio.

• Visits (with interviews) to the barrios by the media is extremely rare.  Seldom does the media take the time and effort to visit and listen to people who represent a great portion of the Venezuelan population.

The reporters were surprised by several things:

1. The fact that people here in the barrio CONFIRMED that during the entire time of "el paro" (the stoppage -which began December 2, 2003 - incited by the anti-Chavez opposition), almost everything was 'business as usual' ... at least 80-90% of all stores and businesses were open and functioning, and still are. (This is unlike what was being reported by the conventional Venezuelan media who reported that the entire country was shut down and on strike).

2. That about half the people approached who were asked about what they thought of the present Venezuelan political situation refused to respond or said "Go ask the politicians or the people who attend marches and demonstrations." (Which contrasts with what much of the Venezuelan media reports are saying about increased voiced opposition support).

3. That the majority of the people believe that Chavez, through good or bad governance, had done the best thing for the people (the thing that any former government had neglected to do); to OPEN the eyes of the poor people, to give them dignity and a voice, to allow them to know and exercise their rights as human beings rather than remaining "slaves" to the richer Venezuelans. (This contrasts with what much of the Venezuelan media and opposition are trying to tell the world; that there is no division between the people, no "class" division, no racism, and that there has never been any).

The eyes of the poor have been opened and some lose their privileges.

There are some anti-Chavez opposition people that write to me saying: "ignorant, communist, socialist, leftist, Canadian -- go home!, you are blind, you do not understand Venezuela, go to Cuba ... you are an embarrassment, etc."

I suggest to the people who respond to me in this fashion to spend some time in the barrios of Caracas.

Come to the barrios to do your reporting and your interviews .... like they did ... the CBC reporter and cameraman and the reporter from Denmark.

Oscar Heck oscarheck111@hotmail.com

www.vheadline.com Posted: Sunday, February 02, 2003 - 1:18:41 PM By: Oscar Heck

VHeadline.com commentarist Oscar Heck writes: This morning at about 8:00 a.m. I walked over to the "parada", the main intersection and entrance to the "barrio" (slum area) where I am at this time.

The "firmazo" ("signing") began before I arrived. It's a one-day coordinated effort to collect signatures throughout all of Venezuela ... a collection of signatures in an attempt by the anti-Chavez opposition (comprised mainly of minority middle-to-upper class Venezuelans), and headed up by the Coordinadora Democratica (Democratic Coordinator), to collect millions of real signatures from people in favor of ousting President Chavez from power as quickly as possible (and this, regardless of the legal process which allows for a binding referendum in August 2003).

Here in the barrio, the line-up for the 'firmazo' ... at 8:30 a.m. ... was approximately 500 people and the organization collecting the signatures (Primera Justicia - a recently born opposition political party) was processing approximately 5-8 people per minute. By 11:00 a.m. (the time at which I write this commentary), there was no more queue ... but people are still coming to sign. They'll be open all day and into the late hours of the evening. This is the only signing station in this Caracas barrio and there are about 6 major barrios in the Caracas area, representing what I estimate to be nearly half the population of Caracas (2 million people).

I made some calculations:

• The estimated population of this barrio is about 400,000.
• If say, 10 people per minute are signed up for a period of 14 hours, a total of  8,400 signatures will have been collected by the end of the day. This represents a total of 2.1% of the population of the barrio.  Throughout Venezuela, my estimate is that at least 50% of the population lives in barrio-like conditions or worse.
• I am sure that the percentage of collected signatures will be substantially higher amongst the middle-to-upper classes throughout Venezuela (which represent, in my estimate, about 35% of the Venezuelan population).
• What portion of the Venezuelan population will be represented by the number of signatures collected?
• What if the 'firmazo' was only held in barrio-like areas, such as in the barrio I am presently at?
• What figures would we get if a 'firmazo' was done to sign up people that WANT Chavez to stay?
• What will the Coordinadora Democratica LEGALLY do with these signatures anyway?

Oscar Heck oscarheck111@hotmail.com

www.morningstar.ca 2 Feb 03(11:12 AM) |  E-mail Article to a Friend

Bay St Week Ahead-Gold Stocks' Glitter Seen Undimmed

TORONTO (Reuters) - Canadian gold-mining stocks haven't hit the ceiling yet, analysts say, even though surging bullion prices and war fears have already lifted them about 20 percent in the past year. Investors traditionally rush to gold stocks as an insurance policy in times of conflict, and with growing momentum toward a war with Iraq, gold issues remain in the spotlight.

Stocks Retreat Dashes Investors' Hopes

NEW YORK (Reuters) - A few months ago, many of financial planner Derek Hobbs' clients decided to plunge back into the stock market, believing the worst was over. Now, their hopes of a rebound after three dismal years have been dashed once again after yet another fizzled rally this month slammed stocks back down to mid-October levels.

OPEC Gears Up to Ward Off Q2 Oil Price Crash

ABU DHABI (Reuters) - OPEC is already gearing up to fend off an oil price collapse that might follow any U.S. assault on major Gulf producer Iraq. Although world oil prices have shot well past $30 a barrel amid war fever and political turmoil in OPEC member Venezuela, key oil ministers are warning that markets could tip into oversupply during the second quarter and spark a price crash.

Canada Says Open to Short-Term Softwood Export Tax

OTTAWA (Reuters) - Canadian Trade Minister Pierre Pettigrew said Friday he was open to the idea of a short-term export tax on Canada's softwood shipments to the United States as long as it led to a long-term solution. 'I'm looking for a long-term policy-based resolution. Should an export tax, as an interim measure with clearly identified exit ramps from it, be useful eventually, we could look into it. But that's not where we are -- we want a long-term policy-based resolution,' he told Reuters.

Investors Reports Higher Profit, Raises Dividend

TORONTO (Reuters) - Investors Group <IGI.TO>, Canada's biggest mutual fund company, reported a stronger fourth-quarter profit Friday and raised its dividend, sending its stock up more than 7 percent. The Winnipeg, Manitoba-based firm saw earnings rise as a sharp fall in operating expenses offset a decline in revenues and funds under management triggered by the worst bear market in decades.

Shell Canada CEO Oversaw Oil Sands, Set to Retire

CALGARY, Alberta (Reuters) - Shell Canada Ltd. <SHC.TO> chief executive Tim Faithfull, who presided over construction of the C$5.7 billion ($3.7 billion) Athabasca oil sands project, its biggest development, will retire in July after four years at the helm, the company said Friday. Faithfull will be replaced as CEO of Canada's No. 2 oil producer, refiner and marketer by Linda Cook, now the London-based head of global gas and power at Royal Dutch/Shell Group <RD.AS> <SHEL.L>, Shell Canada's majority owner.

TransAlta Reports Loss on Hefty One-Time Charges

CALGARY, Alberta (Reuters) - TransAlta <TA.TO> reported a fourth-quarter loss Friday after Canada's biggest investor-owned power generator took one-time charges for the phased shutdown of an aging Canadian power plant, a turbine order cancellation and intensified plant maintenance. TransAlta, with generating stations in Canada, the United States and Mexico, warned of the loss in November, saying the moves were needed to weather weak power markets. Pretax charges totaled C$180 million ($118 million).

Kinross, TVX, Echo Bay Gold Merger Approved

TORONTO (Reuters) - Kinross Gold <K.TO> said Friday that shareholders of TVX Gold and Echo Bay Mines had approved the three-way merger of the Canadian miners, which will create the world's seventh-largest gold producer with output of 2 million ounces annually. The new entity, which will operate under the Kinross name, will begin trading on both the Toronto Stock Exchange (TSX) and New York Stock Exchange Monday and will reflect the three-for-one common share consolidation approved this week by Kinross shareholders.

Decoma Bids 10 Million Euros for Peguform Assets

TORONTO (Reuters) - Decoma International <DECa.TO>, a Canadian autoparts maker, said Friday it made a 10 million euro ($10.8 million, or C$16.4 million) bid for certain assets and businesses of France's financially troubled Peguform. In a release, Decoma said had bid 6 million euros for Peguform's fascia manufacturing business and fixed and intangible assets, and also bid up to 4 million euros for the work-in-progress, raw materials and finished goods inventory of the autoparts company.

New Brunswick to Overhaul Electricity Market

FREDERICTON, New Brunswick (Reuters) - The government of New Brunswick unveiled legislation Friday to open the province's wholesale electricity market and turn its NB Power utility into a commercial venture. But, unlike Ontario and California, where privatization efforts were dramatic and expensive failures, the eastern Canadian province said it was not making any changes in the retail electricity market.