www.forbes.com Reuters, 02.25.03, 7:03 PM ET

CARACAS, Venezuela, Feb 25 (Reuters) - Venezuela's foreign-financed Cerro Negro extra heavy oil upgrading project, shut by an oil strike started on Dec. 2 by foes of President Hugo Chavez, has restarted operations, project partner ExxonMobil (nyse: XOM - news - people) said on Tuesday. Cerro Negro, along with two other extra heavy Orinoco synthetic crude upgrading projects, had been shut by the strike due in part to a lack of natural gas feedstock supplies from state oil firm Petroleos de Venezuela (PDVSA). The four had been pumping around 400,000 barrels per day of oil. "Operadora Cerro Negro S.A. (OCN), an ExxonMobil affiliate, confirms that its upgrader operations have restarted with an initial production of 55,000 barrels per day (bpd) of upgraded crude," a statement from the U.S. oil giant, which is partnered with PDVSA in Cerro Negro, said. "Once the operation has stabilized, and assuming that a reliable supply of gas and hydrogen is maintained, field production will be restored as quickly as possible," ExxonMobil said. Cerro Negro has capacity to process 120,000 bpd of extra heavy crude into 108,000 bpd of synthetic, refineable crude. The Sincor syncrude project is also resuming operations this week. The Hamaca project, which has not yet completed its upgrading unit, restarted limited production last week while Petrozuata is still shut.

abcnews.go.com — By Patrick Markey

CARACAS, Venezuela (Reuters) - Two bombs tore into Spanish and Colombian diplomatic missions in Caracas on Tuesday, injuring five people less than 48 hours after President Hugo Chavez accused the two nations of meddling in Venezuela's political crisis.

Three people, including a 4-year-old girl, were slightly wounded when the blast near the Colombian Consulate sprayed shards of debris and ripped off the building's steel and glass facade at around 1:15 a.m. EST.

Fragments from a smaller explosion minutes earlier at the nearby Spanish Embassy cooperation office hurt two people, authorities said. None of the injured were in serious condition and no one claimed immediate responsibility for the attacks.

"If this had been at two in the afternoon instead of at two in the morning we would have had a lot of dead," Chacao district Mayor Leopoldo Lopez told reporters.

Chavez, whose self-styled "Bolivarian revolution" promises to ease poverty, accused Spain and the United States on Sunday of siding with his enemies and warned Colombia he might break off diplomatic ties over accusations that he met with that country's Marxist rebels.

The timing of the blast was not lost on Washington, which has since tightened security at the U.S. Embassy in Caracas.

"We note that those bombs follow some sharp verbal attacks by President Chavez on the international community, as well as individual Venezuelans and institutions," said State Department spokesman Philip Reeker. He declined to draw an outright connection between the rhetoric and the attacks.

Police refused to comment on possible motives or the type of explosives used by the bombers.

Leaflets scattered at both sites were signed by the "Bolivarian Liberation Force -- the Coordinadora Simon Bolivar urban militias." The Coordinadora Simon Bolivar is a known radical Pro-Chavez group.

"Our revolution will not be negotiated, only deepened," one leaflet read.

BITTER CONFLICT

The twin bombings appeared to be the worst attacks in the Venezuela's recent history. The bitter political struggle between Chavez and his opponents has often flared into violence and street clashes; media outlets critical of the president have been the targets of grenade attacks.

His mostly poor supporters see Chavez's populist reforms as the path to a better life. Opponents accuse the former army paratrooper of ruling like a dictator and inspiring violence with his fiery speeches laced with class warfare rhetoric.

Venezuela's government quickly denied its sympathizers were behind the blasts and suggested that some elements of the opposition had more to gain by isolating the oil-rich nation.

"We believe this is about a plan to create problems between Venezuela and two amicable nations," Deputy Foreign Minister Arevalo Mendez told reporters.

Explosives experts in blue and gray camouflage fatigues picked though the wreckage at the Spanish Embassy site and Colombian Consulate, where they were looking for bomb parts.

An official from the DISIP state security police told local radio that a powerful plastic explosive was placed at the Colombian Consulate, leaving a small but deep crater in the concrete driveway outside.

"All indications are it was a bomb.... They were looking for an alternative site in an isolated area to launch a night-time attack," Colombian Consul General Juan Carlos Posada told Reuters, bits of broken glass crunching under his shoes.

Chavez's criticisms of the United States, Colombia and Spain on Sunday followed their statements questioning the arrest of Carlos Fernandez, a prominent opposition businessman charged with rebellion for leading a two-month strike against the leftist leader. Chavez said they had no right to comment on his nation's internal affairs.

Venezuela's crisis has drawn in the international community, with leaders fearing the world's fifth-largest oil supplier could slide deeper into violence as Chavez allies and enemies face off.

Nobel peace prize winner and former U.S. President Jimmy Carter along with a six-nation group including the U.S. and Spain have backed so-far fruitless talks by the Organization of American States (OAS) to defuse the crisis. Those negotiations are aimed at early elections, fiercely opposed by Chavez.

Another leaflet found at the blast sites criticized the OAS chief Cesar Gaviria and Carter, saying the "revolution" did not need their help in the peace talks.

STRUGGLE SINCE COUP

Chavez and his foes have been locked in a fierce political struggle over his rule since April when he survived a short-lived coup by rebel military officers. The president has hardened his stance against critics he brands "terrorists" trying to oust him by sabotaging the oil industry.

The opposition strike began on Dec. 2; it severely disrupted the vital oil exports that account for half of Venezuelan government revenues. The shutdown fizzled out in February, although the oil sector still struggles to recover.

The president's self-styled "revolution" mingles left-leaning policies, such as land reform and cheap credits for the poor, with nationalism styled after 19th century South American liberation hero Simon Bolivar.

Tuesday's explosions are not the first incidents involving foreign missions in Caracas. A grenade exploded in January at the residence of the ambassador from Algeria, who had promised technical aid to help Chavez stem fallout from the oil strike.

cnews.canoe.ca By JAMES STEVENSON

CALGARY (CP) - Canadians enjoy some of the lowest gasoline prices in the world and if blame is to be assessed for rising prices they should look at government taxes at the pumps, Imperial Oil president Tim Hearn said Tuesday.

Hearn said Canadian pump prices - which averaged 82 cents a litre last week - can be directly connected to international events such as the continuing troubles in major oil producer Venezuela and prolonged war clouds over Iraq. A particularly cold winter on North America's East Coast has also boosted demand and kept crude prices sky high.

"Just take the tax out and take a look at how Canada compares to the U.S. today," Hearn said in an interview. "And everybody says the U.S. has the lowest prices in the world."

Taxes account for almost 40 per cent of the cost of gasoline at Canadian retail stations. Imperial is Canada's largest oil producer, operates the national Esso brand of 2,500 service stations and is 70 per cent owned by global energy giant ExxonMobil.

Hearn said the real price increase of gasoline has gone down in the past two or three decades, while provincial and federal taxes have risen by more than twice the rate of inflation.

"I guess you can never avoid the politics of mischief."

Last week the federal industry committee demanded to hear from Canada's top oil executives on the recent surge in oil prices, which hit Canadians both at the pumps and through home heating oil.

The high price of fuel prompted MPs from all political parties to accuse Canada's big energy companies of collusion and price-gouging. But Hearn said the energy market in Canada is "as efficient" as any country in the world.

"Maybe the committee should have an investigation as to why taxes have been going up for the last 30 years."

Imperial (TSX:IMO) said it has not received any request to appear in front of the federal committee but would be more than willing to defend itself if asked.

"I don't think the Canadian oil industry has anything to be apologetic for," said Hearn.

In a rare meeting with reporters, the head of Imperial said his first year on the job in 2002 was a good one, with earnings of $1.2 billion - the third-largest haul in company history.

Along with a large involvement in the northern Alberta oilsands, including a major ownership stake in giant Syncrude, Imperial is playing a lead role in trying to get a new natural gas pipeline built south from the Mackenzie Valley in the Northwest Territories to the energy-thirsty U.S. market.

Hearn said he was disappointed in the delays in getting preliminary information on the mega-project to regulators. Imperial is six months behind where it wanted to be as partners wait for the Aboriginal Pipeline Group to come up with its $70-million, one-third cost of the preliminary design phase.

He hopes the process can get underway in a few weeks.

Hearn wouldn't confirm recent reports that the Aboriginal Pipeline Group has struck a deal with Calgary-based TransCanada PipeLines after Ottawa refused to guarantee a loan.

"For them to develop a potential funder, and if it's someone that can add value to the project, I think we'd welcome them. I wanted us to be further along than we are today, but it's more important that we get this right at this point in time.

Hearn told analysts months ago the pipeline could be up and running by 2007, but on Tuesday he said funding delays would push that earliest-case scenario back to 2008.

"I think it's a project that is extraordinarily important to the country - the federal government is a big net beneficiary of this project, the aboriginal peoples of the North should be major beneficiaries of this, and of course Imperial and the other producers will also benefit."

www.voanews.com David Gollust State Department 25 Feb 2003, 22:27 UTC

The United States is condemning the bomb attacks early Tuesday against Spanish and Colombian diplomatic offices in the Venezuelan capital, Caracas. The bombings followed criticism of the two countries by President Hugo Chavez on Sunday for alleged meddling in the Venezuela's political crisis.

Venezuelan soldier stands in front of damaged Colombian consulate Officials here say the early-morning explosions at the Spanish embassy and the Colombian consulate were the latest in a troubling series of events in Venezuela since last week, highlighting the need for progress in dialogue between President Chavez and the opposition.

The powerful blasts, within a 15-minute span, injured at least four people and caused material damage at the diplomatic posts and nearby buildings.

At a news briefing, State Department spokesman Philip Reeker condemned the bombings and called for an "expeditious and thorough" investigation of the attacks, which he noted had followed criticism of the two governments, among others, by President Chavez.

Spokesman Reeker said the attacks, and other recent developments in the long-running political crisis, underscore the need for the Venezuelan parties to uphold an agreement they made only last week to avoid violence and curb political incitement:

"It's regrettable that recent events like the unsolved killing of members of Venezuela's armed forces and police, the recent arrests and the threat of arrests of opposition activists and now today's bombings stand in sharp contrast to the commitments that were undertaken by both sides in that agreement," he said. "The pledge from February 18 specifically emphasized the need to curb confrontational rhetoric and moderate the tone, style and content of language, and to reject any manifestations of violence or intolerance."

Hugo ChavezThe bombings came less than two days after President Chavez had criticized Spain and Colombia, along with the United States and Organization of American States Secretary-General Cesar Gaviria, for alleged interference in Venezuela's internal affairs.

All of them had spoken out against the arrest last week of business leader Carlos Fernandez, a key figure in the two-month general strike against Mr. Chavez that faded out earlier this month. Another strike leader, labor federation chief Carlos Ortega has gone into hiding in the face of a warrant for his arrest.

The OAS chief, Mr. Gaviria, has been trying to mediate an end to the Venezuelan political conflict. The United States, Spain and Colombia are among members of an international "group of friends" aimed at supporting the negotiating process.

www.alertnet.org 25 Feb 2003 22:51

WASHINGTON, Feb 25 (Reuters) - The United States condemned bombings against the Spanish and Colombian diplomatic missions in Caracas on Tuesday and suggested a link with verbal attacks by Venezuelan President Hugo Chavez on both countries.

Two bombs tore into the Spanish embassy and the Colombian consulate, injuring five people less than 48 hours after President Chavez accused the two nations of meddling in Venezuela's political crisis.

"Let me strongly condemn today's bombings and, of course, the use of any form of violence," U.S. State Department spokesman Philip Reeker told a daily briefing.

"We note that those bombs follow some sharp verbal attacks by President Chavez on the international community, as well as individual Venezuelans and institutions," he added.

Reeker declined to say that the United States saw a causal connection between the bombs and the rhetoric.

Leaflets scattered at both sites were signed by the "Bolivarian Liberation Force - the Coordinadora Simon Bolivar urban militias." The Coordinadora Simon Bolivar is a known radical pro-Chavez group.

Venezuela's government quickly denied its sympathizers were behind the blasts and suggested that some elements of the opposition had more to gain from the attacks, which could isolate the troubled oil-rich nation.

Reeker said the bombings showed the need for rapid progress in dialogue between supporters and opponents of Chavez.

Chavez's opponents, saying he ruled like a dictator, tried to drive him out of office by launching a general strike in December but the strike fizzled out in February. Chavez says he is a friend of the poor against the old elite.

The Bush administration has been critical of Chavez's policies and was slow to condemn a coup against him last April. It favors the inconclusive dialogue mediated by the Organization of American States.