www.vheadline.com Posted: Monday, February 03, 2003 - 12:55:14 PM By: Charlie Hopkinson

Date: Mon, 3 Feb 2003 16:33:32 -0000 From: Charlie Hopkinson charlie@dragoman.co.uk To: Editor@vheadline.com Subject: Foreign Tour Operators

Dear Editor: Dragoman is an overland tour operator that brings in-bound tourists to Venezuela throughout the year.   We operate through Asia, Africa and Latin America and believe that we have fair knowledge of the areas that we visit and good grasp of the political and security situations in the most of the countries that we travel through.

The recent political problems in Venezuela have meant that our programs there have been completely disrupted.

In actual fact it was not directly because of the political and civil unrest that we have had to cancel our trips to Venezuela ... but rather because of the British Foreign & Commonwealth Advice concerning the current situation.

This advise stipulates.... "We advise against all but essential travel to Venezuela, including the island of Margarita, for the time being because of the serious political situation and shortages of food and fuel. If you do have to travel to Venezuela, you should take great care with your security arrangements. If you are already in Venezuela, you should leave the country unless you consider your presence there is essential...."

Tourism is not considered essential.

This advice means that,  no matter what the reality of the situation in Venezuela, we cannot bring tourists to Venezuela.  If we do,  various insurance policies that we hold could be nullified and the company become directly liable for any situation affecting our groups.

• This advice appears to be in conflict with what we are being told by a variety of sources in and around Venezuela.  Not only is this bad for our company, but ten times worse for Venezuela's lucrative tourist industry.

I wonder whether the local tourist industry and the Venezuelans employed within that industry, know that if it were not for the Western Governments advice (which appears to follow the US advice), most inbound tour operators would be bringing tourists back to Venezuela?

What is even more surprising is that we are being advised not to visit Venezuela when there has been no specific threat to foreign tourists ... and yet we are told we can continue visiting Zanzibar in Tanzania, despite a specific threat being issued.

I wonder whether the advice is politically motivated in any way?

I also wonder what Venezuelans feel about the advice that we foreigners are being given.  Do they realize that the outside world is being told that Venezuela is one of  the most dangerous places to visit in the world?

Charlie Hopkinson charlie@dragoman.co.uk

www.vheadline.com Posted: Monday, February 03, 2003 - 1:37:59 PM By: Gustavo Coronel

VHeadline.com commentarist Gustavo Coronel writes: I am, as many VHeadline readers already know, a member of the Venezuelan sector which opposes the continuation of the Presidency of Hugo Chavez.

I also oppose a coup d'etat against the government, similar to the one Chavez attempted in 1992 to unseat democratically elected President Carlos Andres Perez. Perez, as you might remember, was later displaced from the Presidency by the Constitutional action of a true Attorney General, by reasons of misuse of government funds.

For those who remember that process, the reasons utilized at the time by the Attorney General were pale in comparison to the documented (and even admitted by Chavez on national TV) misuse of government funds by the Presidency of Hugo Chavez.

This double standard has a clear explanation ... the Attorney General who forced Perez out was an honest and independent man ... the current Attorney General is a dishonest man, totally subservient to the government.

Where are we now?

At this point in time, the civic national strike is ending in its original form and is being replaced by an open attitude of civil disobedience which will take multiple forms.

After 60 days of significant national stoppage, many commercial sectors are returning to partial activity. The reason is simple ... thousands of small and medium size businesses are financially hurt. Many are already beyond salvation, and most have suffered significantly.

This is the truth.

It would be a mistake, however, to assume that the civic, national strike was simply a self-inflicted wound by those who oppose Chavez. It would also be simplistic to assume ... although I imagine the temptation will be great ... that Chavez has emerged victorious.

The truth is that both sides have suffered tremendous material losses.

The opposition has left thousands of bankrupt private companies on the battlefield, many members of the middle class unemployed and important feelings of frustration and anguish in millions of citizens who wanted a rapid resolution to the crisis.

The government has been left on the brink of insolvency, destroying PDVSA ... its main source of income, is being forced to take the opposition very seriously and obliged, in order to survive, to drop the mask of democracy that had worn with great skill for many months. International opinion about Chavez has now shifted importantly.

In Europe, and the US, they no longer view him as a well-meaning if un-cultured democrat ... they now see him as a throw back to the 19th century type of strong man with a populist and authoritarian approach to power. The failure of this model has been total in the past, and there is no reason to expect any different outcome this time.

An obvious result of the strike has been to illustrate the enormous size of the  population that wants Chavez out ... the size, frequency and geographical diversity of the marches staged by Chavez' adversaries leave little doubt to impartial observers that the majority has long shifted from the government to the opposition ... this has forced Chavez to rely more and more on the armed forces to cling to power.

But we have already seen that once a government loses the required popular support and leans on the armed forces, their survival becomes, at best, a short term proposition.

As I write this, there is a gigantic sign-in going on all over Venezuela. I am not aware of a similar event ever taking place anywhere else. The people of Venezuela decided to stage an "election" ... manning the electoral sites with civilian volunteers ... to ask citizens if they want Chavez to go or to stay.

This is the Venezuelan's answer to the grotesque maneuver by a illegitimate group of the Supreme Tribunal of Justice which invalidated the Consultative Referendum. We are fighting illegality with legality, anti-constitutional force with constitutional power, military savagery with civilized attitudes ... the contrast is so great that the world is finally taking notice.

The outcome of the crisis ... in a favorable scenario for the opposition ... will probably take the shape of a revocatory referendum on August 19, followed by an early Presidential election, as proposed by former President Carter and already accepted by them.

The government has not agreed to this, and is not expected to agree, as they are most unwilling to be counted.

In parallel, the deterioration of the social, economic and political conditions of Venezuela is advancing at such a rapid pace that the pressure for a rapid resolution to the crisis is mounting.

This is a most dangerous ingredient, especially when combined with indications that the government will resort to all legal and illegal maneuvering to stay in power.

If all doors to a civilized, electoral solution are closed by Chavez, this country will erupt in violence. We have already seen that Chavez is an adept to violence ... his actions in 1992 and in April 2002 caused almost 200 deaths.

As governing is clearly beyond his capability, he will resort to force to try to dictate his will to the people. A civil war would be our ultimate tragedy but, unfortunately, this is the preferred Chavez scenario and the only chance he has to stay in power ... provided, of course, that the Armed Forces keep loyal to him instead of being loyal to Venezuela.

This is where we are today.

Venezuela is entering an acute period of economic depression and political degradation. We have inflation at almost 40%, exchange controls, price controls (ineffective and damaging in the long run), a government budget financed by new debt, the media in danger of being closed down, the military confiscating foodstuffs to sell to third parties without accounting for the proceeds, laws being passed in a hurry by the government majority in the National Assembly to obtain definitive control of the Supreme Tribunal of Justice, military officers like the "burping" General emerging as Chavez' main supporters, military officers like General Baduel as shareholders of a TV station which is contracting propaganda with the government, criminals like Orlando Castro ... relatively fresh from prison in the US for fraud ... as one of the intellectual mentors of the government.

We are entering the dark ages and hope Carter ... who looks like Gandalf ... can give us a hand.

PS -- Several sign-in centers of the opposition, all over the country, are being attacked at this moment by violent groups of government "sympathizers" ... this will make some citizens afraid to sign. More than the net effect of these violent activities, what they show is the contrast between real Democracy and Gorilla-ism. Two days hence, on February 4, the government will "celebrate" the failed coup of 1992 ... the immoral celebration of a bloody, criminal coup is yet another sign of the totalitarian nature of this government. Is there now any doubt?

Gustavo Coronel is the founder and president of Agrupacion Pro Calidad de Vida (The Pro-Quality of Life Alliance), a Caracas-based organization devoted to fighting corruption and the promotion of civic education in Latin America, primarily Venezuela. A member of the first board of directors (1975-1979) of Petroleos de Venezuela (PDVSA), following nationalization of Venezuela's oil industry, Coronel has worked in the oil industry for 28 years in the United States, Holland, Indonesia, Algiers and in Venezuela. He is a Distinguished alumnus of the University of Tulsa (USA) where he was a Trustee from 1987 to 1999. Coronel led the Hydrocarbons Division of the Inter-American Development Bank (IADB) in Washington DC for 5 years. The author of three books and many articles on Venezuela ("Curbing Corruption in Venezuela." Journal of Democracy, Vol. 7, No. 3, July, 1996, pp. 157-163), he is a fellow of Harvard University and a member of the Harvard faculty from 1981 to 1983.  In 1998, he was presidential election campaign manager for Henrique Salas Romer and now lives in retirement on the Caribbean island of Margarita where he runs a leading Hotel-Resort.  You may contact Gustavo Coronel at email ppcvicep@telcel.net.ve

www.thisismoney.com Monday view, Daily Mail 3 February 2003

WAR in the Gulf seems unavoidable. The only remaining doubts are over its timing, nature and duration. From a stock market perspective, a swift and definitive outcome is essential to restore confidence and reignite the global economy. The oil markets have other worries.

Some point to the last Gulf War and predict a lasting collapse in the cost of crude once the tanks roll into Baghdad. That looks like wishful thinking. Major issues for oil prices have been piling up since the last conflict.

It may be that the Western economies will face the burden of expensive oil for years to come.

The bears argue otherwise. Despite four years of high oil prices, their consensus remains that prices will fall back rapidly to $18 a barrel. In reality, this decade will be remembered for seemingly endless periods of oil at $30 a barrel and petrol at almost 80p a litre.

Saddam Hussein has the ability to change the price of oil for decades. Should Iraq choose to destroy its wells and damage its vast underground reservoirs, the rest of the oil producing world would face a major challenge. In spite of soothing words from Saudi Arabia, even a temporary loss of Iraqi output and capacity would be disastrous.

Under UN control, Iraq has been pumping some 2.6m barrels a day, pretty close to its sustainable capacity. Almost 2m barrels have been exported daily to Western markets.

During any Gulf conflict, this flow is likely to stop. If allied troops move quickly, the taps can be turned back on under UN/US supervision. But world stocks are low, so even a short-lived disruption might trigger a price hike. Stocks should then start to recover and prices could drop.

But if Baghdad sabotages its oil infrastructure, there are big problems. We are already being short-changed by Venezuela thanks to its strikes.

Peak global oil demand is 77m barrels a day. Maximum supply capacity, in spite of billions spent every year by the industry, is stuck below 80m barrels. All the surplus capacity is in the hands of Opec.

That surplus is now less than normal due to quota busting. On a sustainable basis, there may be little more than 3m barrels a day of unused supply. Prolonged loss of Iraqi oil would leave the world pumping virtually every available barrel.

No system can operate for long near 100% of capacity, particularly when it is largely in the hands of unstable suppliers. One more producer glitch would leave the world physically short of oil at a time of low stocks and rising seasonal demand.

The likelihood is that Iraq's oilfields will survive unscathed. A new, benign regime in Baghdad could eventually see sanctions lifted. Iraq has the capability over several years to boost significantly its capacity and exports. But this will not happen overnight, so it is foolhardy to assume that oil prices will decline immediately.

Opec's January agreement to boost supplies is little more than a placebo for a gullible patient. Most producers are already pumping out as much as they can. The deal legitimises recent cheating, but will add little new oil to top up empty tanks.

US market is gearing* up for its summer driving season with low stocks and scant chance of weaker demand. Once again, US motorists can expect to pay $3 a gallon.

A rapid end to war could stimulate stronger economic growth and lift oil demand. Oil prices have been firm for four consecutive years without meaningful demand growth. Supply is expanding too slowly, as evidenced by the failure of the world's major quoted oil companies to increase their output.

The myriad uncertainties plaguing the world's key oil producers will not vanish overnight. Poor handling of Iraq, coupled with the unresolved situation in Israel/Palestine, could mean heightened tensions among the Arab states.

Extra supplies are coming largely from Angola, Kazakhstan, Brazil and Russia. The days of predominantly secure supplies from the US and Europe are ending. Risk to supply has arguably never been greater, so the belief that cheap oil will return is dangerously complacent.

• AFTER 15 years in the City researching the oil industry, Alan Marshall is now a freelance writer and consultant.

www.dw-world.de   Venezuela's opposition has declared its 63-day general strike ended, except in the oil sector, and has switched tack by launching a non- binding petition telling President Hugo Chavez to hold elections. A defiant Chavez claimed he had defeated strikers, saying oil production was approaching two million barrels per day, around two-thirds the normal level. Strikers put output at one million. Chavez has also rejected an early election, saying the constitution did not allow a referendum until August

houston.bizjournals.com 10:53 EST Monday 

Hanover Compressor Co. on Monday said it has exercised its right to return its 30 percent stake in a Venezuelan natural gas compression facility venture to a unit of Schlumberger Ltd.

Hanover, a Houston-based natural gas compression services provider, said the right would have expired Feb. 1. Completion of the transfer of its interest in the PIGAP II venture back to Schlumberger awaits approval by Petroleo y Gas SA, a unit of Petroleos de Venezuela SA , Venezuela's state-owned oil company.

Hanover bought its stake in the venture when it purchased Production Operators Corp. from Schlumberger in August 2001.

A unit of Williams Cos. owns the remaining 70 percent stake in the venture, which operates a natural gas compression plant in Venezuela that processes 1.2 billion standard cubic feet per day of natural gas. The natural gas processed by PIGAP II is re-injected into oil reservoirs for enhanced oil recovery.

Hanover said it is in talks with Schlumberger to explore the possibility of retaining the 30 percent ownership in the venture.