sg.biz.yahoo.com Monday February 24, 8:30 PM (This article was originally published Sunday)

CARACAS (Dow Jones)--Crude production at Venezuela's state-owned oil monopoly Petroleos de Venezuela SA (E.PVZ) currently stands at 2.02 million barrels per day, the company president said Sunday.

"We are now at the production level of 2.02 million barrels and by the end of next week it will be 2.5 million barrels per day," Ali Rodriguez said. However, fired staff of PdVSA claim production is much lower and stands at around 1.4 million b/d while exports stand at 1 million b/d. Rodriguez didn't give any new export numbers.

Some 35,000 oil workers at PdVSA joined a nationwide strike Dec. 2 last year that was aimed at the resignation of President Hugo Chavez. The strike severely crippled exports and production which stood at a level of around 3 million b/d by the end of November.

Chavez, discussing production levels at his televised Sunday show "Hello President" said he expects the Organization of Petroleum Exporting Countries, or OPEC, not to have any problems that Venezuela would "progressively put crude stocks on the market that haven't been used," he said, without elaborating further.

He added that OPEC's Secretary-general Alvaro Silva is already working on the case. Silva is Venezuela's former Oil Minister and was appointed Secretary-general after Rodriguez became PdVSA President. Last year, Venezuela exceeded its official output target of 2.5 million b/d by around 400,000 b/d when it drew from crude inventories that are located in the Caribbean. Venezuela's OPEC quota - at least on paper - is 2.819 million b/d.

Venezuela's request comes as the company struggles to go beyond the 2 million b/d production level. After focusing on easy oil fields that don't require much added pressure to get the oil flowing, PdVSA faces difficulties as mature oil fields are more labor and capital intensive and take more time to pump oil. Experts have said they doubt PdVSA would reach 2.5 million b/d any time soon due to a lack of financial and human resources.

However, Sunday, a local newspaper reported PdVSA plans to lift the force majeure on its operations in the coming days as the situation at the company is almost back to normal.

"I believe we are in the condition to lift the force majeure...we will lift it in a matter of days or hours," Luis Marin was quoted as saying. Marin is in charge of company operations in eastern Venezuela. He could not be reached for additional comment.

A declaration of force majeure three days after the nationwide strike started Dec. 2 temporarily released the company and its clients from contractual obligations.

Meanwhile, the company has been split in half, with two operating entities in the eastern and western part of the country. Company headquarters will remain in Caracas, albeit slimmed down in a dramatic fashion.

El Universal reported Sunday that the number of dismissals at PdVSA was increased by 1,785 to a total of 14,548, or over 30% of its work force. The new firings were in the western part where Lake Maracaibo is located.

Also, El Universal reported that Chavez will head the so-called National Oil Council, or CNP, that will define the short, medium and long term strategy of the oil behemoth. The Planning, Finance, Trade and Oil Ministry will make up the rest of the Oil Council.

-By Fred Pals, Dow Jones Newswires; 58414-2887461; fred.pals@dowjones.com

www.etaiwannews.com 2003-02-24 / Associated Press / (Reuters)CARACAS, Venezuela

A leading opponent of President Hugo Chavez who helped command a two-month national strike was ordered held under house arrest early Sunday pending further investigations.

Carlos Fernandez, president of the Fedecamaras business chamber, was seized Wednesday at gunpoint by secret police at midnight on five charges including treason, civil rebellion and incitement to commit offenses.

Just over 72 hours later, a judge struck down three of the charges, including treason. The rebellion and incitement charges were upheld, said Pedro Berrizbeitia, one of Fernandez's lawyers.

Secret police rushed Fernandez, 52, out of the courthouse to be taken to his home in Valencia, 66 miles (110 kilometers) west of Caracas, while proceedings continued against him.

"We are pleased that it has been admitted that Fernandez committed a crime," said Dario Vivas, a pro-Chavez legislator.

Vivas said he would challenge the decision of house arrest, claiming the civil rebellion charge warrants prison while prosecutors formalize the accusations against Fernandez.

The judge's decision was announced at 2 a.m. Sunday, thirteen hours after the hearing began.

Strike co-leader Carlos Ortega remained at large on Sunday. As president of the Venezuelan Workers Confederation labor confederation he partnered Fernandez in spearheading the work stoppage that paralyzed the vital oil industry and devastated the economy.

Ortega said he was going into hiding after a warrant was issued for his arrest on Thursday.

www.abs-cbnnews.com

CARACAS, Venezuela - Venezuelan President Hugo Chavez warned the world to stop meddling in the domestic affairs of his troubled South American nation on Sunday, as police locked up a strike leader on "civil rebellion" charges.

The populist president accused the United States and Spain of siding with his enemies, warned Colombia he might break off diplomatic relations, and reprimanded the chief mediator in tortuous peace talks for stepping "out of line."

"I ask all of the countries of this continent and of the world ... are you going (to) stop this meddling?" Chavez asked angrily, during his state-sponsored television show 'Alo Presidente.' "This is a sovereign nation."

The tongue-lashing followed a recent flurry of diplomatic communiques expressing concern over Carlos Fernandez, a strike leader and prominent businessman who was yanked out of a Caracas steakhouse on Thursday at gunpoint by police.

A judge placed the silver-haired executive under house arrest on Sunday to await trial for charges of civil rebellion and criminal instigation, which could land him up to 26 years in prison. He spearheaded a two-month nationwide shutdown by oil workers and industry in a failed bid to force elections.

Chavez carped that the same international worry by diplomats over Fernandez wasn't shown when he was briefly ousted in a 48-hour coup last year. He said some countries, including Spain and the United States, applauded the putsch.

"It's worth remembering that the Spanish ambassador was here, in this room, applauding the coup. So the Spanish government is going (to) keep commenting?" Chavez asked.

"We say the same thing to the government in Washington. Stop making mistakes ... A spokesman comes out there saying he's worried. No! This is a Venezuelan matter."

Venezuela's crisis has drawn the international spotlight with leaders afraid the world's No. 5 supplier of oil could slide into civil war as Chavez allies and enemies face off.

Hailed by supporters as a champion of the poor, reviled by enemies as an ignorant dictator, Chavez has pledged to crack down on enemies of his self-styled "revolution."

Chavez crushed an oil walkout by firing 13,000 dissident workers, and laughed off the two-month-old strike which hurt the private sector and was meekly abandoned in early February.

He won an arrest warrant for another strike leader, union boss Carlos Ortega, and threatens to lock up a group of media moguls he dubs the "Four Horsemen of the Apocalypse."

The United States, Spain and four other countries have dispatched diplomats to the negotiating table in a bid to defuse tensions fueling the crisis. But the talks have so far proven fruitless, and Chavez on Sunday seemed pushing away members the six-nation group.

Chavez reserved his most severe criticism for Cesar Gaviria, who is the chief mediator in talks to end the political deadlock. Gaviria, a former Colombian president, is the head of the Organization of American States.

"Mr. Gaviria, this is a sovereign nation, sir. You were president of a country. Don't step out of line," Chavez said.

The maverick leader, whose fiery rhetoric inflames adversaries, also took time on Sunday to include Colombia in his tirade. The neighboring nation's foreign minister accused Chavez last week of meeting frequently with rebel leaders.

Chavez has always denied those allegations, and on Sunday criticized the country for providing asylum for Venezuela's brief president during the April coup -- Pedro Carmona.

"What do they want? For us to break off (diplomatic) relations? That we break off ties?" Chavez exclaimed.

"Over there in Colombia they had a party on the day of the coup ... They applauded Carmona and they have Carmona over there in Bogota. He lives over there, that fugitive."

Venezuela's internal standoff has left at least seven dead and scores injured in street violence since December. Police are also investigating last week's killings of three dissident soldiers and an anti-Chavez protester, which relatives of the victims blame on political persecution.

Please send your comments or feedback to newsfeedback@abs-cbn.com

www.chron.com Feb. 23, 2003, 11:04PM Houston International Scene By MAE GHALWASH Copyright 2003 Houston Chronicle

Latin Americans are closely watching the newly elected leftist Brazilian government's reform policies, which are a middle ground between socialist and free-market strategies, Enrique Hidalgo-Noriega, a senior analyst for the New York-based Eurasia Group, said in Houston last week.

Having been hit by a series of political upheavals and economic crises, Latin Americans have reached a "crossroads," with people wondering whether to continue with political and economic reforms toward democracy and free markets, Hidalgo-Noriega said.

Some politicians blame the reforms for the crises, while others insist the reforms are insufficient, Hidalgo-Noriega said. The Brazilian government of Luiz Inacio Lula da Silva believes that the solution lies somewhere in between: reforms are necessary but should be coupled with some government control, Hidalgo-Noriega said.

Lula's people criticize past economic reforms for giving too much autonomy to state companies and too much power to regulating agencies.

"The government wants to have a greater say in planning and administration," Hidalgo-Noriega said. "The objective is to take back some of the autonomy and the power."

One example is the planned sale of major hydroelectric plants, which, according to energy reports, are not likely to be auctioned off to the highest bidder but to the company that will offer better terms for consumers. Also, the government appointed some loyalists to the state-oil firm Petrobas but kept many of the company's experienced career employees.

Energy pundits have said the moves hint of socialism, but they are not absolute dismissals of free market policies. Hidalgo-Noriega agrees and points out that Brazil is not heading in the direction of Venezuela, where President Hugo Chavez has appointed political comrades with little or no business or energy experience to run the state oil company Petroleos de Venezuela S.A.

While Hidalgo-Noriega says he supports more autonomy and power for companies and agencies, he points out, for example, that Brazil's energy sector has had failings, like the blackouts of 2001. Whether the government's new approach will correct these failings is something pundits are waiting to see, he said.

As for Latin America, the looming war with Iraq is hindering its emergence from its crises, the analyst said. The effect the war will have on world economy undoubtedly will delay any economic recovery in countries like Argentina, which has just started to recover from its crisis.

For Mexico, whose development depends on the United States, the war is particularly troublesome. The government of President Vincente Fox is caught between wanting to appease America in its move toward war and its fear of alienating the Mexican people, who are largely against the war, in an election year.

A delay in economic recovery would cause the general populations to "not equate democracy with prosperity, but with poverty," Hidalgo-Noriega said.

International calendar:

·Brazil/Venezuela: Paulo Sotero, Washington correspondent for the leading Brazilian newspaper O Estado Des Paulo, will discuss how the leaders of Brazil and Venezuela might direct their countries through reform or crisis at 11:30 a.m. Wednesday at the Westin Galleria Hotel, 5060 W. Alabama. Reservations are required. Call the Houston World Affairs Council at 713-522-7811.

·Eurasia: The Greater Houston Partnership will present a workshop on Eurasia, focusing on oil and gas projects and the investment opportunities there. The event is at 8:30 a.m. Wednesday at the GHP, 1200 Smith St., Suite 700. Today is the last day to register. Call Cari Broderson at 713-844-3635.

·United Nations: The United Nations Association-Houston is organizing a group for young professional people of diverse ethnic backgrounds who are interested in international affairs. The meeting starts at 10:30 a.m. Saturday at the Whole Foods Market, 4001 Bellaire Blvd. Reservations are required. Call 713-626-7410.

·Great Britain: Louis Markos, professor of English at Houston Baptist University, will discuss British romantic poetry. at 6:30 p.m. Wednesday at the Briar Club, 2603 Timmons Lane. Reservations for the event, which includes dinner, are required. Call the English-Speaking Union at 713-666-1044.

·Japan: The Kodo Drummers of Japan will perform in Houston to help commemorate the 150th anniversary of the Japan-U.S. relationship and the 100th anniversary of the Texas-Japan relationship. The event starts at 8 p.m. Friday and Saturday at Jones Hall, 615 Louisiana. Reservations are required. Call 713-2274772.

www.mises.org by Llewellyn H. Rockwell, Jr. [Posted February 24, 2003]   Oil prices have reached a 29-month high, reflecting a variety of factors including the prospects for war, expectations of lower supply, strikes and other unrest in Venezuela and Nigeria, and inflationary pressures. At the same time, the Producer Price Index recorded a 1.6 percent jump in January, the biggest across-the-board increase since January 1990.   Just as the script dictates, cries of "gouging" are now heard across the land.   "I think a lot of it is pure greed," a consumer told the New York Times. Another said, "If there's a chance of the oil companies' driving up the prices, they'll do that." Another: "I don't blame the government, I blame the gas companies."  Still another: "They are going to get all the money they can out of us."   In covering economic issues, journalists have a way of quoting the most ignorant possible statements by consumers. And you watch: these statements will, in turn, be followed by statements from officials warning gas stations and oil companies against raising prices too much. A poor station owner will be singled out by a local newspaper and might eventually face some sort of federal charges for economic crimes.   Of course gas station owners and oil companies want to make a buck. So does everyone else, in good times and bad. They want to charge the highest price possible, consistent with the highest profit. At the same time, consumers want to pay the lowest price possible. It is in the marketplace that these differences are sorted out in the glorious and peaceful institution of voluntary exchange, where a meeting of minds takes place and society's needs are met.   For hundreds of years, thanks to the insights of economic science, we've known a lot about the forces that push prices in a range of different directions. We know that producers will offer more supply at a higher price than a lower price, and we know that more consumers will buy more at a lower price than a higher price. We know that all of this happens without the guiding hand of government. Students are taught this in Economics 101 (whether they remember it is another matter).   What we do not know are the precise weighting of factors that go into why prices increase at any particular time. The bits of information that are built into the price of anything are too diffuse and vast. For the same reason that no price on the market can be completely unpacked and dissected, it is also impossible for any outsider to know what the price of anything "should" be. That is why the market price exists in the first place: to provide an evaluation of the value of resources relative to their availability, their desirability, and the costs associated with delivering them.   Ah, prices! How we take them for granted! In fact, they are guides to the conduct of life itself. What should you have for dinner? Should you take that vacation or not? Should you buy or rent? Should you supplement your wardrobe or not? Should you heat your house till it's warm and cozy or just wear a sweater indoors? All these decisions are made based on the price of things. They are what make rational daily living possible. Without them, all would be chaos.   But somehow, in a time of crisis when prices leap around in various directions, doing their job to coordinate supply and demand and conserve resources to overcome the uncertainty of the future, all this wisdom is forgotten. Consumers suddenly look at their retailer as the enemy and the government starts taking names. The worst part is that it is precisely during times of market uncertainty and change that prices are needed more than ever to coordinate resources.   When the oil price rises, it suggests more supply is needed. More precisely, it sends two signals: to consumers it says conserve, and to producers it says invest. If nothing else changes, and people follow the price signals, the price will end up falling as consumers cut back purchases and producers bring more product to market. Putting a price ceiling on oil will short circuit this mechanism, causing producers to offer no more than is currently available (or even less), and consumers to continue buying as much as they always have. Again, if nothing else changes, the result will be shortages, which the government will attempt to rectify through ever more stupid policies.   In the case of the oil price, there is an additional complication. Many people in powerful position are dead-set against a lower oil price. The environmentalists are nervous about lower prices because they fear it will lead to more gas consumption and SUV purchases. This is one reason, and not love of caribou, that they oppose opening up more public lands for drilling.   In government, we've had sanctions against Iraq that have artificially kept supplies off the market, driving up the price. This is something the Bush administration, closely connected with the oil industry, approves. David Frum reports in his account of his time with the Bush administration that Bush himself is a passionate opponent of lower oil prices. Frum once suggested that Bush call for lower prices to help consumers. Bush looked at him like he was nuts, and pointed out that lower prices are the source of all the problems.   Max Boot, current fellow at the Council on Foreign Relations and former editor of the Wall Street Journal opinion page, provides further evidence that this is the case. "For that matter, would our government really want a steep drop in prices? The domestic oil patch—including President Bush's home state, Texas—was devastated in the 1980's when prices fell as low as $10 a barrel. Washington is generally happy with a range of $18 to $25 a barrel."   Even as far back as the 2000 presidential race, Richard Cheney told "Meet the Press" that "we need a national energy policy." He explained that prices can be too high but that they can also be too low ("no one will invest"). He was asked, "what is the correct price of oil," and Cheney mumbled on about the need for price stability.   These are very dangerous attitudes based on remarkable ignorance of the forces of economics. No one can know in advance what the correct price of anything should be. If prices fall, it would indeed signal producers to offer less. Some producers, maybe even most, would go out of business. This is precisely what should happen.   There is no way for government to plan better than the market, especially for unusual market disturbances, which is why Soviet-style programs like the Ford administration’s "Strategic Petroleum Reserve" are so ridiculous. They work as subsidies to the oil industry even as they keep supplies on the market artificially low. Knowing that the government may, at any time, unleash all this pent-up supply on the market, producers face a diminished incentive to drill and process oil for consumption.   But to the average consumer, none of this matters. They see only the price meter on the gas pump, and get mad at the poor fellow behind the counter that processes their credit cards. Then they go running to the government for help. This is the worst possible outcome. Remember that fellow who said "I don't blame the government"? Well, he should. And if the government intervenes to force the price down and shortages result, he will have even more reason to do so.

Llewellyn H. Rockwell, Jr. is president of the Mises Institute in Auburn, Alabama, and editor of LewRockwell.com. Send him MAIL, and see his Mises.org Daily Articles Archive.