reuters.com Wed February 19, 2003 04:56 PM ET By Phil Stewart

CARACAS, Venezuela (Reuters) - Venezuela reeled on Wednesday from the shotgun-killings of three dissident soldiers and a protester opposed to President Hugo Chavez, as police and grieving relatives split over whether the quadruple homicide was political.

According to police investigations, about twelve unidentified armed men kidnapped the four victims on Saturday night as they were leaving a protest. They were bound, gagged, and some were tortured before the gunmen executed them.

The last two bodies, badly decomposed and showing signs of torture, were found on Tuesday on the outskirts of Caracas.

The case has fueled opposition fears that Chavez may be leading the country toward armed struggle by encouraging supporters to silence dissenting voices, more than 10 months after narrowly surviving a coup led by rebel officers.

Chavez has always called his self-styled "revolution" a peaceful one.

Police attempted to soothe frayed nerves on Wednesday, saying the motive for the killings appeared to be revenge, not politics. They cited an alleged scuffle on Saturday between the slain soldiers and a fellow protester, Edgar Leonardo Machado, who has become the lead suspect in the killings.

"We're investigating," said deputy police chief Raul Yepez. "But the clear, precise motive, the strongest ... is revenge."

Family members of the victims slammed the investigations as corrupt. They accused the police of trying to avert a scandal, and said the four dead were clearly killed for their protests against the populist president.

"They want to clear themselves politically, and they say it's about revenge. My brother had no enemies. The only enemy we have here is Hugo Chavez," said Miguel, whose 21-year-old brother, air force soldier Felix Pinto, was one of the dead.

He spoke from the Plaza Altamira in the wealthy eastern part of the capital, the center stage of Venezuela's opposition protests and the last place the four victims were seen alive.

BOLIVARIAN CIRCLES

Despite occasional violence in Venezuela's political standoff, there have been no confirmed selective killings of Chavez's allies or enemies. Still, street clashes have claimed at least seven lives and left scores injured since December.

Chavez has styled his government on Cuban socialist ideals and the nationalist fervor of Venezuela's 19th century revolutionary leader Simon Bolivar.

After gaining power in 1998, he set up community networks called "Circulos Bolivarianos," or "Bolivarian Circles," which were meant to spread the word of his revolution across the city's honeycomb of poor urban sprawls.

But the opposition says Chavez's supporters take his calls to defend the revolution literally. They brand the groups "Circles of Terror," and have started their own armed "self-defense" groups to guard against attack.

The political situation, marked by daily marches by supporters and opponents of the president, is growing more tense as Chavez refuses to bend to opposition calls to hold early elections.

His term in office ends in 2007, but Chavez jokes he will stay in power for two more decades.

Police say key to solving the mystery of the recent killings will be the testimony of a 14-year-old girl, who apparently was Pinto's underage lover and was abducted along with the four victims but survived the shooting.

The girl has been hospitalized in intensive care and was unable to give investigators a formal statement, police said.

The case is mired in controversy, especially since it appears to involve a deadly Dec. 6 shooting at the Plaza Altamira, which was witnessed by two of the victims.

Zaida Perozo, a female protester whose body was found on Monday, was wounded along with 20 others in the Plaza Altamira and had been considering testifying against an alleged gunman.

Relatives of the deceased said they feared more attacks would follow on opposition leaders.

"This is like a chess game," said Pinto's brother. "First they go after the pawns and then later for top leaders."

yellowtimes.org Printed on Wednesday, February 19, 2003 @ 15:07:08 EST   ( ) By Paul Harris YellowTimes.org Columnist (Canada)

(YellowTimes.org) – There are many reasons for George Bush's single-minded drive toward Baghdad. In other articles I have written for YellowTimes.org, I hinted that a not so obvious reason for the drive against Iraq is Bush's war against Europe. In fact, I have now come to believe that is the primary reason for his Iraqophenia.

Whenever a nation decides to go to war, there are plans made for who is going to win and who is going to lose; no one goes to war expecting to lose, but it isn't always the obvious target of the aggression that is the real thrust behind the war. Sometimes, it isn't a case of what you expect to win from a war, but rather a case of what you hope someone else loses; and it doesn't have to be your stated enemy who you hope will sustain the losses. In this case, Bush's hoped-for victim is the European economy. It is robust, and is likely to become much stronger in the easily foreseeable future. Britain's entry into the European Union is inevitable; Scandinavia will join sooner rather than later. Already, even without those countries, there will be 10 new member nations in May 2004, which will swell the GDP of the E.U. to about $9.6 trillion with 450 million people as against $10.5 trillion and 280 million people in the United States. This represents a formidable competing block for the United States but the situation is significantly more complex than what is revealed just by those numbers. And much of it hinges on the future of Iraq.

I have written before, as have many others, that this upcoming war is about oil. To be sure there are other reasons, but oil is the single most impelling force. Not in the way you might expect, however. It isn't so much that there are believed to be huge untapped oil reserves in Iraq, untapped only due to outdated technology; it isn't so much an American desire to get its grubby hands on that oil; it is much more a question of whose grubby hands the Americans want to keep it out of.

What precipitated all of this was not September 11, nor a sudden realization that Saddam was still a nasty guy, nor just the change in leadership in the United States. What precipitated it was Iraq's November 6, 2000 switch to the euro as the currency for its oil transactions. At the time of the switch, it might have seemed daft that Iraq was giving up such a lot of oil revenue to make a political statement. But that political statement has been made and the steady depreciation of the dollar against the euro since then means that Iraq has derived good profits from switching its reserve and transaction currencies. The euro has gained about 17 percent against the dollar since that time, which also applies to the $10 billion held in Iraq's United Nations "oil for food" reserve fund.

So the question arises, as it did for George Bush, what happens if OPEC makes a sudden switch to euros? In a nutshell, all hell breaks loose.

At the end of World War II, an agreement was reached at the Bretton Woods Conference which pegged the value of gold at $35 per ounce and that became the international standard against which currency was measured. But in 1971, Richard Nixon took the dollar off the gold standard and ever since, the dollar has been the most important global monetary instrument, and only the United States can produce them. The dollar, now a fiat currency, is at a 16-year trade-weighted high despite record U.S. current-account deficits and the status of the U.S. as the leading debtor nation. The U.S. national debt as of April 4, 2002 was $6.021 trillion against GDP of $9 trillion.

Trade between nations has become a cycle in which the U.S. produces dollars and the rest of the world produces things that dollars can buy. Nations no longer trade to capture comparative advantage but rather to capture needed dollars to service dollar-denominated foreign debts and to accumulate dollar reserves in order to sustain the exchange value of their domestic currencies. In an effort to prevent speculative and potentially harmful attacks on their currencies, those nations' central banks must acquire and hold dollar reserves in amounts corresponding to their own currencies in circulation. This creates a built-in support for a strong dollar that in turn forces the world's central banks to acquire and hold even more dollar reserves, making the dollar stronger still.

This phenomenon is known as "dollar hegemony," which is created by the geopolitically constructed peculiarity that critical commodities, most notably oil, are denominated in dollars. Everyone accepts dollars because dollars can buy oil.

The reality is that the strength of the dollar since 1945 rests on being the international reserve currency for global oil transactions (i.e., "petro-dollar"). The U.S. prints hundreds of billions of these fiat petro-dollars, which are then used by nation states to purchase oil and energy from OPEC producers (except presently Iraq and, to some degree, Venezuela). These petro-dollars are then re-cycled from OPEC back into the U.S. via Treasury Bills or other dollar-denominated assets such as U.S. stocks, real estate, etc. The recycling of petro-dollars is the price the U.S. has extracted since 1973 from oil-producing countries for U.S. tolerance of the oil-exporting cartel.

Dollar reserves must be invested in U.S. assets which produces a capital-accounts surplus for the U.S. economy. Despite poor market performance during the past year, U.S. stock valuation is still at a 25-year high and trading at a 56 percent premium compared with emerging markets. The U.S. capital-account surplus finances the U.S. trade deficit.

Since it is the U.S. that prints the petro-dollars, they control the flow of oil. Period. When oil is denominated in dollars through U.S. state action and the dollar is the only fiat currency for trading in oil, an argument can be made that the U.S. essentially owns the world's oil for free.

So what happens if OPEC as a group decides to follow Iraq's lead and suddenly begins trading oil on the euro standard? Economic meltdown. Oil-consuming nations would have to flush dollars out of their central bank reserves and replace them with euros. The dollar would crash in value and the consequences would be those one could expect from any currency collapse and massive inflation (think of Argentina for an easy example). Foreign funds would stream out of U.S. stock markets and dollar denominated assets; there would be a run on the banks much like the 1930s; the current account deficit would become unserviceable; the budget deficit would go into default; and so on.

And that's just in the United States. Japan would be particularly hard hit because of total dependence on foreign oil and incredible sensitivity to the U.S. dollar. If Japan's economy tumbles, so does that of many other countries, especially the United States in a crescendo of dominos.

Now, this is the potential effect of a "sudden" switch to euros. A more gradual shift might be manageable but even that would change the financial and political balance of the world. Given the size of the European market, its population, its need for oil (it actually imports more oil than the U.S.), it may be rapidly approaching that the euro will become the de facto monetary standard for the world.

There are some good reasons for OPEC as a group to follow Iraq and begin to value oil in euros. There seems little doubt that they would relish the opportunity to make a political statement after years of having to kowtow to the U.S., but there are solid economic reasons as well.

The mighty dollar has reigned supreme since 1945, and in the last few years has gained even more ground with the economic dominance of the United States. By the late 1990s, more than four-fifths of all foreign exchange transactions, and half of all world exports, were denominated in dollars. In addition, U.S. currency accounts for about two thirds of all official exchange reserves. The world's dependency on U.S. dollars to pay for trade has seen countries bound to dollar reserves, which are disproportionately higher than America's share of global output.

It is important to note that the euro is not at any disadvantage versus the dollar when one compares the relative sizes of the economies involved, especially given the E.U. enlargement plans. Moreover, the E.U. has a bigger share of global trade than the U.S. and while the U.S. has a huge current account deficit, the E.U. has a more balanced external accounts position. One of the more compelling arguments for keeping oil pricing and payments in dollars has been that the U.S. remains a large importer of oil, despite being a substantial producer itself. But the EU is an even larger importer of oil and petroleum products than the U.S., and represents for OPEC a more attractive market, closer and less domineering.

The point of Bush's war against Iraq, therefore, is to secure control of those oil fields and revert their valuation to dollars, then to increase production exponentially, forcing prices to drop. Finally, the point of Bush's war is to threaten significant action against any of the oil producers who would switch to the euro.

In the long run, then, it is not really Saddam who is the target; it is the euro and, therefore, Europe. There is no way the United States will sit by idly and let those upstart Europeans take charge of their own fate, let alone of the world's finances.

Of course, all of this depends on Bush's insane plan not becoming the trigger for a Third World War, as it so readily might.

[Paul Harris is self-employed as a consultant providing Canadian businesses with the tools and expertise to successfully reintegrate their sick or injured employees into the workplace. He has traveled extensively in what we arrogant North Americans refer to as "the Third World," and he believes that life is very much like a sewer: what you get out of it depends on what you put into it. Paul lives in Canada.]

Paul Harris encourages your comments: pharris@YellowTimes.org

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www.theledger.com By DULUE MBACHU Associated Press Writer LAGOS, Nigeria Nigerian officials and leaders of two powerful oil unions opened talks Wednesday on a five-day-old strike threatening crude exports. Delegates reported progress on union demands after the first of two scheduled meetings. Workers were awaiting the outcome of a second meeting before deciding whether to end the strike, said Belema Osibodu, a spokeswoman with Nigeria's Department of Petroleum Resources. More than 800 white-collar workers of the department, which monitors oil loading at export terminals run by multinationals including ExxonMobil, ChevronTexaco, Royal/Dutch Shell and TotalFinaElf, walked off the job Saturday. They were joined Tuesday by about 600 blue-collar colleagues. The strike further roiled the global oil market at a time when possible war in Iraq and a prolonged strike in Venezuela have pushed prices to two-year highs. Nigeria is the world's six-largest exporter of crude, with half of its output going to the United States. Oil companies said the strike had not yet affected loading at their export terminals. The government has sent in replacement workers. The strikers are demanding more than a year in some unpaid wages - including unpaid overtime, expenses and travel allowances. They also want greater autonomy and better financing for the department, which they say is crippled by inefficient bureaucracy. Osibodu said the first meeting, between leaders of the Department of Petroleum Resources and the unions, resolved the pay issues. The second round of talks concerned demands for autonomy, she said. Nigeria produces more than 2 million barrels of oil a day, more than 95 percent of which is pumped by joint ventures between the government and major oil companies.

www.canada.com GILLIAN LIVINGSTON Canadian Press Wednesday, February 19, 2003

TORONTO (CP) - With more international assets, Petro-Canada expects oil and gas production to rise 55 per cent over the next five years as the company consolidates previous acquisitions and looks at further expansion, a senior company executive said Wednesday.

Current projects under development, "will result in excess of 600,000 barrels of oil equivalent a day for Petro-Canada by the end of 2007," Petro-Canada vice-president Gary Bruce told an analyst conference. "That's a 55 per cent increase over the next five years."

Last May, Calgary-based Petro-Canada completed its $3.2 billion takeover of most of the international assets of German-based Veba Oil and Gas, giving the Canadian company new assets in the North Sea, Africa and elsewhere.

That integration is now done and Petro-Canada is producing "well in excess of 200,000 barrels of oil equivalent a day from our international assets," said Bruce, vice-president of corporate communications and business development.

"These businesses provide us with a strong foundation and many opportunities for future growth," said Bruce,

Petro-Canada also said it sees big opportunities to expand its international operations in the wake of the Veba deal, which brought on people with expertise in international oil and gas production who can help the company take on new projects.

"We also are looking at other areas," he said. "So we do look at new areas if they fit with our capabilities and if they meet our investment criteria - and they are of significant size."

Looking ahead, Bruce said growth will come from Veba's assets in Syria, Libya, Trinidad, Venezuela, and the North Sea. In Canada, production growth is expected from Petro-Canada's Hibernia and Terra Nova oil projects off Newfoundland as well as the northern Alberta oilsands.

"Our strongest growth will come from East Coast oil, oilsands and international," Bruce said.

Petro-Canada (TSX:PCA) is one of Canada's largest energy companies, producing oil and natural gas as well as refining and selling gasoline and other fuels through a national chain of service stations.

In 2002, Petro-Canada's overall production averaged 382,400 barrels of oil equivalent a day, up from 196,500 barrels a day in 2001.

The company attributed that to the Veba acquisition and the higher production in its East Coast oil operations.

In 2003, overall production is expected to average 475,000 barrels of oil equivalent a day with the addition of production from offshore Newfoundland. That's up 24 per cent from 2002, Bruce said.

One asset Bruce said Petro-Canada will keep watch on is the Syncrude oilsands joint venture in Fort McMurray, Alta., in which the company already owns a 12 per cent stake.

Earlier this month, EnCana Corp. (TSX:ECA) of Calgary sold its 10 per cent stake in Syncrude to Canadian Oil Sands Ltd. for $1.07 billion in cash, making it the biggest shareholder of one of Canada's premier heavy oil projects.

The deal was done by the royalty trust that owns Canadian Oil Sands and gives it a 31.74 per cent stake in the project.

"We were a bit surprised that EnCana decided to sell - but I'm sure they have their reasons," Bruce said.

"It also is a bit difficult these days on the market to compete with these income trust companies, as you know they get a bit of a tax advantage over companies like ourselves," he noted, adding, "that wasn't really the case for us."

However, if any other partners in Syncrude want to sell off their stake, "we'd certainly look at it and we plan on being in Syncrude . . . for a long, long time," Bruce said, adding that Petro-Canada sees that "as a very long-term highly profitable investment."

www.forbes.com Reuters, 02.19.03, 2:56 PM ET BOGOTA, Colombia, Feb 19 (Reuters) - Workers at Colombia's state-owned oil firm Ecopetrol began a 24-hour strike on Wednesday to protest both the firing of a worker for alleged vandalism and a joint-venture with ChevronTexaco Corp. (nyse: CVX - news - people), union leaders said. The stoppage by Workers' Union (USO), whose members make up almost half of Ecopetrol's 7,400 employees, was not affecting production or shipments of crude oil, officials said. The strike began at 6 a.m. local time (1100 GMT) to protest the firing of an employee in the refinery city of Cartagena and Ecopetrol's "Catalina" contract with ChevronTexaco, said Rodolfo Gutierrez, USO's president. USO broke off wage talks with Ecopetrol for the second time on Tuesday, angered by a contract under which the American firm will invest $150 million on Caribbean natural gas deposits to provide domestic markets in Colombia and export to Venezuela. The union believes that Ecopetrol should exploit the gas reserve itself rather than take on a foreign partner. Local television stations on Tuesday broadcast a video showing an employee vandalizing Ecopetrol machinery but Gutierrez said the video "did not provide categorical evidence" to justify his firing. USO strikes generally have little effect on work at Ecopetrol's oil fields or at its two refineries, the 235,000 barrel-per-day Barrancabermeja plant and the 76,000 bpd complex at Cartagena. The union, which went on strike three times in 2002, held a 24-hour work stoppage on Jan. 16 to protest an arrest warrant against its international representative, on charges of connections to Marxist guerrillas. If there is no agreement on a new wage deal by March 22, the government will appoint a compulsory wage arbitration tribunal to resolve the dispute.