www.sfgate.com Tuesday, February 25, 2003

(02-25) 13:37 PST CARACAS, Venezuela (AP) --

In another sign that Venezuela's oil industry is recovering from a strike, the oil minister said Venezuela was lifting a suspension on some production and export contracts.

Petroleos de Venezuela SA invoked a contract provision three days after an oil workers strike began Dec. 2 that temporarily released it and its clients from contractual obligations.

The provision has been lifted on production and export of three types of Venezuelan crude as well as liquified petroleum gas, Oil Minister Rafael Ramirez said Tuesday.

Some 35,000 of 40,000 PDVSA workers joined a general strike intended to oust President Hugo Chavez. The strike failed and was called off Feb. 4, though oil workers stayed off the job. The government has fired more than 15,000 strikers at PDVSA.

PDVSA President Ali Rodriguez says production now stands at 2.02 million barrels per day, compared to a pre-strike figure of 3.2 million barrels per day. Dissident staff say output is closer to 1.5 million barrels per day.

Before the strike, Venezuela was the globe's fifth-largest oil exporter and a top supplier to the United States.

Ramirez and Rodriguez were traveling to Washington to convince U.S. officials that oil company operations are almost back to normal.

www.voanews.com VOA News 25 Feb 2003, 23:43 UTC

Venezuelan authorities say at least four people have been injured after powerful bombs exploded in the Colombian and Spanish diplomatic missions in Caracas.

Officials say the bombs exploded within 15 minutes of each other Tuesday, first at the Spanish Embassy and then at the Colombian consulate. The blasts left the facades of both buildings in shambles and damaged nearby structures.

No one immediately claimed responsibility for the attacks, but authorities say leaflets signed by a pro-government group were found scattered at both sites.

The trouble comes two days after Venezuelan President Hugo Chavez accused Colombia and Spain of siding with his opponents.

The two countries, among others, had expressed concern about the government's recent arrest of business leader Carlos Fernandez.

He helped organize Venezuela's two-month general strike that was aimed at forcing President Chavez to resign and call early elections. Venezuelan Deputy Foreign Minister Arevalo Mendez condemned the attacks, saying authorities will find the people responsible.

State Department spokesman Philip Reeker said the bombings and other recent developments in Venezuela highlight the need for that government and its opponents to uphold a recent agreement to avoid violence.

The Atlanta-based Carter Center, which works around the world to mediate conflicts, also called on both sides to abide by the commitments stated in the accord. Last year, the Carter Center sent a delegation to Venezuela in an effort to bridge the country's political divide.

www.forbes.com Reuters, 02.25.03, 7:30 PM ET

CARACAS, Venezuela, Feb 25 (Reuters) - Oil major BP <BP.L> sold its stakes in two Venezuelan exploration blocks to Europe's Perenco for $160 million, shedding assets that produced 26,100 barrels per day in 2002, BP said on Tuesday. BP said the asset sale was part of a general corporate restructuring and had nothing do with the country's ongoing political crisis, which sparked an oil strike in December that severely disrupted the oil sector of the world's No. 5 crude exporter. "I would like to underscore the fact that this does not relate to the political crisis. This is purely a commercially driven decision," a BP spokesman said. Venezuela's state-owned oil firm PDVSA still must approve the sale, BP said. The world's third-biggest oil company said it was selling its 60 percent stake in the Boqueron field in eastern Venezuela and its 100 percent stake in the Dessarrollo Zulia Occidental, known by its initials DZO and located in Venezuela's west. Following the sale, BP said it would continue with two non-operated exploration and production projects in Venezuela. BP also continues in negotiations with the Venezuelan government for an offshore natural gas block in the OPEC nation's Deltana region.

english.eastday.com

OPEC president says oil prices are inflated by war concern OIL consumers worldwide have enough supplies to meet demand, the OPEC president said on Monday, adding that prices are inflated by traders' concern that a war with Iraq will disrupt shipments.

"The answer from our customers is they don't see the need for more oil now," Abdullah bin Hamad al-Attiyah, the OPEC president and Qatari oil minister, told reporters in London, where he was attending an oil conference. Oil prices are inflated by at least US$5 a barrel because of war concern, he said.

The Organization of Petroleum Exporting Countries, which pumps a third of the world's oil, meets on March 11 to consider oil quotas for the second quarter, when demand will slow because of the end of the Northern Hemisphere winter. Oil prices in London have surged 65 percent in the past year to US$32.92 a barrel.

The OPEC president said ministers would discuss at next month's meeting in Vienna whether to suspend production quotas temporarily to boost supplies should Iraqi oil output be halted because of a U.S.-led attack, among other scenarios.

"We will meet in March and we will discuss it," he said. "We will discuss all options."

Last week, OPEC officials said the group may suspend quotas in the event Iraq's exports are cut off by an attack.

The country produces about 3.2 percent of the world's oil.

OPEC raised its output target by 6.5 percent, or 1.5 million barrels a day, starting February 1, in an effort to lower prices, which have surged on concern of an attack on Iraq and a strike in Venezuela.

The group, except Iraq, restrains oil output to keep its oil-price benchmark between US$22 a barrel and US$28. The price has stayed above the range since December 16.

Iraq has no quota as its trade is under UN oversight.

OPEC will consider implementing an informal accord to raise quotas by at least 500,000 barrels a day should the oil benchmark stay above US$28 a barrel for 20 consecutive trading days, al-Attiyah said. The 20th day would be this Friday.

The agreement "can be triggered," though ministers may decide to wait until they meet before taking any decision on changing quotas, the minister said.

www.dailytelegraph.co.uk By Simon English in New York  (Filed: 26/02/2003)

New York motorists are furious that petrol prices have risen above $2 a gallon in the city and are accusing the oil industry of profiteering from the Iraq crisis. 

Gas gripe: New Yorkers pay about 34p a litre for petrol - an 'absurd' price, said one

The American Automobile Association claims the price rises have little to do with a change in the costs to big oil companies, which it says are exploiting "fear and speculation".

At $2.04 for a US gallon of regular unleaded, New Yorkers are paying 53 cents a litre, or 34p, compared with about 77p charged in Britain.

Yesterday's New York Post claimed in a front page headline that motorists are being "hosed", while interviewees described the cost of petrol as "absurd", "crazy" and "price gouging". Across America, petrol prices are at the highest since June 2001, rising by more than 50 cents since the start of the year.

Oil companies say a strike in Venezuela and higher crude oil prices are responsible for the strife of the American motorist and warn that further bad news is likely if a war begins. Rising fuel costs are just one factor behind a slump in the confidence of US consumers, who account for two thirds of all spending in the world's largest economy.

Figures from the Conference Board yesterday show that confidence is near a 10-year low, with the consumer sentiment index falling to 64 in February from 78.8 in January. Conference Board director Lynn Franco said the readings "paint a gloomy picture", suggesting little prospect of an improvement in the economy.

By early afternoon in New York the Dow Jones had lost another 74 points to 7784.