www.iol.co.za February 03 2003 at 02:51PM By Matshelane Mamabolo

President Thabo Mbeki warned on Sunday that a United States-led military attack on Iraq would send oil prices through the roof and scupper attempts at African economic development.

Mbeki, speaking after a meeting with British Prime Minister Tony Blair, said the Iraqi government had told him it was eager to co-operate with United Nations weapons inspectors scouring the country for weapons of mass destruction.

A self-appointed champion of the developing world, Mbeki has campaigned against armed intervention, fearing that a war against Iraq could destabilise the Middle East and hamper development efforts in Africa.

"If you had a war, oil prices would shoot up to the extent that we would have to say goodbye to African development," he said, adding that many of Africa's crippling debt problems sprung from a surge in oil prices in the early 1970s.

'We must do everything to avoid a war'The threat of war in the Middle East - which supplies 40 percent of world crude exports - and a two-month oil strike in Venezuela have already pushed prices well beyond $30 (about R257).

The looming threat of war dominated talks between Blair and Mbeki.

"It was a very frank meeting. The president told the prime minister that war with Iraq could be avoided, and he was sending his deputy foreign affairs minister to Iraq to persuade the Iraqis to be more pro-active," Mbeki's spokesman said.

"He said we must do everything to avoid a war which would have devastating consequences for the African continent and push up the price of oil," he added.

Blair is the strongest supporter of US President George Bush's uncompromising stance on Iraq. Both men said on Friday that Iraq had only a few weeks to come clean about any weapons of mass destruction or face military action.

'It is possible to resolve this matter without going to war'"It is possible to resolve this matter without going to war," Mbeki insisted. "We have been talking to the Iraqi government. What they have been saying to us is that they are very keen and very willing to co-operate fully with the inspectors."

Mbeki also said any attack on Iraq must have a fresh mandate from the United Nations in the form of a new resolution. - Reuters

• This article was originally published on page 2 of The Daily News on 03 February 2003

southflorida.bizjournals.com 10:00 EST Monday  Robin Londner  

Officials of the Air Transport Association have asked the federal government for access to the nation's strategic fuel reserves to control rising jet fuel prices, according to media reports.

Fuel is the second-largest expense after labor for most airlines. The cost has risen nearly 30 percent, to almost 90 cents a gallon, in the last three months.

In a Friday Reuters report, officials from ATA, a lobbying group that represents most domestic airlines, said it is forming a plan to present to Congress and the Bush administration for easing cost pressures caused by taxes and rising fuel costs. While the airlines said they have yet to agree on what, specifically, to ask for, Reuters said carriers have already informally asked the government to give them access to the nation's strategic petroleum reserves. The newswire said the airlines made the request "to mitigate an expected spike in jet fuel prices in the event of an Iraqi conflict."

Among other options outlined by Reuters, the carriers could ask the government to lift aviation security taxes and fees imposed since Sept. 11, 2001, or to temporarily relax anti-trust laws.

A change in the way airlines receive fuel could impact Port Everglades. The Broward County port is the second-largest East Coast non-refinery center for petroleum products. As the primary port in southeast Florida handling petroleum, Port Everglades distributes products to 12 surrounding counties from as far north as Vero Beach, south to Key West, and across to Florida's west coast. Port Everglades also provides all the jet fuel requirements of Miami International, Palm Beach International and Fort Lauderdale-Hollywood International airports and Homestead Air Force Base.

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The majority of the port's petroleum arrives from refineries in the Gulf of Mexico along with Venezuela, Aruba, the Bahamas and Mexico. More than 1,000 petroleum tanker-trucks leave the port every day.

In fiscal year 2001, the port processed 117.9 million barrels of fuel, or 16.77 million tons.

A phone message left for a Port Everglades spokeswoman was not immediately returned.

American, United, Delta, Northwest and Continental airlines all cited jet fuel prices as a significant cost item in their fourth quarters earnings reports, with the total cost about 10 percent higher than the same quarter last year. If airlines can buy fuel from the country's strategic fuel reserve, the thinking is other suppliers would have to reconsider raising their prices.

Financial analysts have estimated the major U.S. carriers lost from $8 billion to $10 billion last year, the year both United Airlines and US Airways filed for Chapter 11 protection. The industry has warned a war with Iraq could push more airlines into bankruptcy.

So far, Congress has told the airlines to take more measures to help themselves before expecting the government to step in with significant aid.

timesofindia.indiatimes.com REUTERS[ MONDAY, FEBRUARY 03, 2003 08:30:21 PM ]

NEW DELHI: Union Petroleum Minister Ram Naik said on Monday the government planned to boost the country's strategic crude oil reserves to 45 days from 15 at an estimated cost of 43.50 billion rupees.   The statement came amid the looming threat of a U.S.-led war against Iraq, which the United States accuses of thwarting U.N. inspectors' efforts to strip Iraq of its alleged weapons of mass destruction.   "We have been asked to conduct a study by a professional agency to finalise the creation of the strategic reserves," Naik told reporters after a meeting with Prime Minister Atal Behari Vajpayee.   "We would like to have 45 days of strategic reserves," he said. "Right now, it is just 15 days and Japan has 120 days."   India has 17 refineries that can process 2.3 million bpd and imports 70 percent of its crude oil needs.   Petroleum ministry officials say India is better prepared today than it was during the Gulf War in 1991 as the country was then a big importer of diesel, which accounts for 40 percent of local demand. Now, India exports oil products and has more storage capacity.   Naik said the country was making arrangements for supplies from some other nations apart from its traditional Middle East suppliers in "case of any conflict between Iraq and the U.S". Naik did not give details.   He said the government could either impose a tax on petroleum products or give grants to oil companies to cover the cost of increasing the reserves.   Naik said the cost of maintaining the oil reserves was estimated to be about 14 billion rupees.   The prime minister has asked the petroleum ministry to accelerate the process of acquiring oil equity abroad to boost crude resources abroad, he said.   "From one country we now have oil equity in nine countries and four more are in the pipeline. The four newcountries are Venezuela, Qatar, Kazakhstan and Indonesia," Naik said.

abcnews.go.com — By Barbara Lewis

LONDON (Reuters) - Oil prices fell sharply on Monday as Venezuelan exports recovered from a supply-choking strike and after OPEC ministers warned of a glut in supplies in the second quarter when winter demand ebbs.

But the threat of a U.S.-led war on oil-producer Iraq kept crude above $30 a barrel.

In London, IPE Brent crude was trading 53 cents weaker at $30.52 a barrel, while U.S. light crude dropped 71 cents to $32.80 a barrel.

"The Venezuelan strike is clearly cracking. The question is how quickly they can ramp up production," said J.P. Morgan's Paul Horsnell.

Venezuelan President Hugo Chavez said on Sunday crude oil output had risen to nearly 1.8 million barrels per day (bpd), up from a low of 150,000 bpd after the strike began in December and more than half of the 3.1 million bpd pumped in November.

Oil strikers said production stood at 1.2 million bpd.

Data from shipping agents showed Venezuela's oil exports rose to 890,000 bpd in the week to February 1 from 550,000 bpd a week earlier, but were still only one-third of normal levels of 2.7 million bpd before the strike.

Opposition leaders, who want Chavez to resign, scaled back the nine-week action on Sunday in the non-oil sector only.

OPEC CONCERNS OVER GLUT

A return of oil sales from Venezuela, the world's fifth biggest oil exporter, could put pressure on the OPEC producers' group to rein in output.

The Organization of the Petroleum Exporting Countries agreed in January to raise official production limits by 1.5 million bpd from February 1 to offset the Venezuelan outage.

But OPEC ministers warned at the weekend that oil markets could tip into oversupply in the second quarter and trigger a price collapse.

"If Venezuela comes back (to full capacity), we could have four million bpd or more floating," said OPEC President and Qatari Oil Minister Abdullah al-Attiyah.

Non-OPEC supplies also looked robust, with output from Russia, the world's second largest exporter, hitting a post-Soviet high.

Russian Energy Ministry sources said exports via Russia's Transneft pipeline monopoly rose 200,000 bpd in January compared to December and output reached a new high of 8.07 million bpd.

But even if supplies have grown, analysts predict oil prices will not fall far until uncertainty is resolved over Iraq, which sells roughly two million bpd of crude to the world market.

Traders fear supplies might be disrupted, not just from Iraq, but from elsewhere in the oil-rich Middle East if there is a military strike against Baghdad.

"In the short term the market is stuck," said J.P. Morgan's Horsnell.

He said dealers were awaiting Secretary of State Colin Powell address to the United Nations on Wednesday when he has pledged to present "straightforward, sober and compelling" proof that Iraq is hiding banned weapons.

Writing in the Wall Street Journal, Powell said the United States sought peaceful disarmament.

"But we will not shrink from war if that is the only way to rid Iraq of its weapons of mass destruction," he wrote.

www.smartmoney.com February 3, 2003

CARACAS (AP)--Banks, shopping malls, factories and schools opened Monday as opponents of President Hugo Chavez eased a 64-day-old strike, a day after hundreds of thousands of Venezuelans signed petitions demanding his resignation.

On Sunday, opponents signed the petitions, including one that would cut Chavez' term from six years to four. Organizers claimed 4 million citizens signed. The figure could not be verified.

"The pen is our weapon," said Julio Borges of the opposition party Justice First. "Today demonstrates that the struggle hasn't ended. It didn't end with the strike."

Chavez claimed victory over his foes after they agreed Friday to ease the already-waning strike to protect businesses from bankruptcy.

"They have the 'F' of failure on their foreheads," Chavez gloated while congratulating his government for completing four years in power Sunday. "Today we crown the victory and continue with an offensive strategy."

Labeling his opponents as "coup-plotters, fascists and terrorists," Chavez vowed that the strike leaders would pay for the damage to the nation. "They can't remain unpunished ... They must go to prison."

Stores began filling up with products that had become scarce, including fresh milk, juice and bottled drinking water. Lines disappeared at banks, which restored normal working hours for the first time in two months.

Universities and many schools resumed classes. Other schools were holding assemblies to decide whether to open this week. Strike organizers said shopping malls and factories would be opening part-time.

Strike leaders said the walkout would continue in the oil industry, which provides half of government revenue and 70% of export earnings. But lines at service stations in Caracas were also diminishing as the government gradually increased oil production.

Crude oil production is at about 1.8 million barrels a day, according to Chavez. Production was 3 million barrels a day in November and dipped as low as 150,000 barrels a day at the height of the strike. Striking workers say output is now slightly over 1 million barrels.

The most popular initiative on the petition is a constitutional amendment that would cut Chavez's term from six to four years. It needed the signatures of 15% of the electorate - or about 1.8 million people - and would clear the way for general elections later this year.

The opposition set up 4,000 tables nationwide Sunday to gather signatures. Even though they appeared to have gotten far more signatures than they needed, opposition leaders said they would seek more on Monday.

"We feel that they have taken our freedom to express ourselves," said Marisela Gaye, an insurance worker who was waiting to sign in Plaza Francia in eastern Caracas.

A popular opposition rallying ground, the plaza was filled with people waiting to add their names to the lists. Many dressed up their babies in the red, yellow and blue of Venezuela's national flag and brought dogs wearing sweaters with the same colors. The crowd frequently broke into chants of: "It's going to fall, it's going to fall, the government is going to fall!"

A nonbinding referendum on Chavez's rule was originally scheduled for Sunday. Business, labor and opposition groups called the strike Dec. 2 to pressure Chavez into accepting the vote, but the Supreme Court suspended the referendum because of a technicality.

Government and opposition have been locked in negotiations mediated by Organization of American States Secretary General Cesar Gaviria since November, but failed to end the stalemate. What to do with the striking oil workers remains a major sticking point.

As many as 35,000 of the industry's 40,000 workers joined the strike, but most have returned to work, the government says. Chavez has fired more than 5,000 who refused.

Chavez was first elected in 1998 and re-elected in 2000 with 60% of the vote. He promised radical change in the oil-rich South American country, where 80% of 24 million people live in poverty.

Chavez's opponents accuse him of driving the economy into the ground while bulldozing the country's democratic institutions.