biz.yahoo.com Reuters Wednesday February 26, 11:30 am ET

WASHINGTON, Feb 26 (Reuters) - Federal Reserve Chairman Alan Greenspan said on Wednesday a recently reported sharp drop in a consumer confidence index for February was significant but not particularly a surprise.

"So it is a very significant decline but...it is not a particular surprise. The order of magnitude is certainly a surprise but not the correction in that regard," Greenspan told the Senate Banking Committee.

On Tuesday, the Conference Board said its index of consumer confidence for February slumped 15 points to 64, taking the index to its lowest level since October 1993.

Greenspan said gasoline prices, which have soared partly due to geopolitical tensions such as the situation in Iraq and Venezuela, were in part to blame for poor consumer confidence.

"Consumer confidence indexes tend to be affected by events that consumers are acutely aware of such as the dramatic rise in gasoline prices," he said.

www.poncacitynews.com

HOUSTON -- ConocoPhillips and its equity affiliates' proved reserves were 7.8 billion barrels of oil equivalent (BOE) at year-end 2002, excluding 0.3 billion barrels of Canadian Syncrude.

The U.S. Securities and Exchange Commission regulations define oil sands reserves as mining related, therefore the oil sands associated with the company's syncrude operations are not reported as part of the conventional oil and gas proved reserves base.

The ConocoPhillips merger was consummated on Aug. 30, 2002, and used purchase accounting to recognize the fair value of the Conoco Inc. assets and liabilities. Therefore, results for the 12 months of 2002 include eight months of activity for Phillips Petroleum Company and four months of activity for ConocoPhillips. Primarily as a result of the merger, 3.1 billion BOE was added to the company's worldwide proved reserves at an estimated finding-and-development (F&D) cost of $5.60 per BOE.

Pro Forma Operating Information

To provide meaningful prior-period comparisons, the company is providing the following pro forma operating information. This pro forma information was prepared by combining the historical statistical information of Conoco and Phillips for all reporting periods presented.

On a pro forma basis at the end of 2001, ConocoPhillips' reserves were 8.4 billion BOE, excluding syncrude. In 2002, the company produced approximately 0.6 billion BOE. During the year, reserves were added through extensions and discoveries, improved recovery and limited strategic purchases.

However, these reserves additions were offset by project deferrals, reservoir performance revisions, production sharing contract oil price effects, and deferred timing on major project approvals. In addition, the company began a major divestiture program designed to focus its exploration and production portfolio on lower-cost legacy assets. Consequently, reserves at the end of 2002 were 7.8 billion BOE, excluding syncrude.

For the five-year period from 1998 through 2002, ConocoPhillips replaced 216 percent of its production at an average estimated F&D cost of $5.40 per BOE. Excluding the effects of acquisitions and dispositions over the same period, the company replaced 103 percent of its production at an average estimated F&D cost of $8.05 per BOE.

Outlook

"Reserves bookings in 2002 were anomalous when placed in the context of our past performance and future expectations," said Bill Berry, executive vice president of Exploration & Production. "The company evaluates its reserve replacement performance over a long-term time frame. Using a longer term time frame recognizes that large projects are commercialized over multi-year periods and better matches reserve replacement and spending patterns.

"Going forward, we expect reserves additions from the advancement of several legacy projects. We are poised to continue substantial reserves growth in the future from our existing base."

Reserves additions in 2003 are expected from Kashagan in Kazakhstan, Corocoro in Venezuela, the Ekofisk growth project in Norway and, assuming ratification of the Timor Sea Treaty, the Bayu-Undan gas export project.

Berry concluded, "The outlook beyond 2003 also is favorable, consistent with the plans outlined at the company's meeting with analysts in November 2002. ConocoPhillips' legacy project advancements include additional satellite field developments in Alaska, development of Surmont heavy oil in Canada, Phase II of the Bohai development in China, additional gas sales in the Corridor block in Indonesia, and gas from Canada's Mackenzie Delta. Furthermore, we have substantial known gas resources awaiting commercialization including the Brass LNG project in Nigeria, development of the Sunrise field in the Timor Sea, and Arctic gas from Alaska's North Slope."

ConocoPhillips is an integrated petroleum company with interests around the world. Headquartered in Houston, the company had approximately 57,000 employees and $77 billion of assets as of Dec. 31, 2002. For more information, go to www.conocophillips.com.

www.nzherald.co.nz 27.02.2003

A year ago, the proposals for a second Gulf War seemed very much the brainchild of the American right. The intellectual arguments backing the conflict emerged almost entirely from hard-right US think tanks and senators.

But then a funny thing happened: a significant portion of the dissident left began to come out, in dribs and drabs, for overthrowing Saddam through force. There is now a considerable school of British centre-left thinkers and commentators who are lobbying hard for the war to happen so the Iraqi people can be freed: Christopher Hitchens, Nick Cohen, John Lloyd, Julie Burchill, Roger Alton, and David Aaronovitch (who has a unique claim to consistency among this group, since he was calling for Saddam to be overthrown by the US over three years ago in the Independent).

On the surface, there seem to be few similarities between these disparate lefties-for-the-war. Lloyd, a senior reporter for the Financial Times and contributing editor at the New Statesman, for example, is a fierce defender of the Blair government, while Cohen detests New Labour.

Yet below the surface there is an intriguing commonality: almost all of them are former communists.

John Lloyd, who was a member of the Communist Party and considered himself a Marxist until his early thirties, identifies a strand of Marxism which seems to have echoes in the pro-war arguments being made today. He explains: "It's that side of Marx that argues that imperialism was good for India and industrialisation good for the working class. It's the side of Marx that disliked soft liberals, and said that if you're going to make the world better you have to go through a number of necessary evils. I don't think Marx was especially worried about those evils -- he was a real arsehole -- but we [Marxists] accepted that in order for history to triumph and a more enlightened future to prevail, certain bad things would have to be endured."

Although Lloyd was never what he calls a "break-any-amount-of-eggs-to-make-an-omelette communist", there is a similar acceptance on the pro-war left of necessary violence and the creation of victims which soft liberals blanch at.

The pro-war left insist that power - even American hyper-power - can be used for constructive purposes. Lloyd says that "when I ceased to be a communist and therefore ditched an essentially undemocratic philosophy, I adopted democracy as a new faith with the real fervour of the convert. We [centre-left ex-communists] believe passionately in democracy because we've reasoned ourselves towards it, so we are perhaps more prepared to support wars that establish or defend it. We are articulating the democratic case for war. Our belief is that the revolution which has really lasted is the democratic revolution emerging from France and the US in the eighteenth century. We believe that liberal democracy still holds out a promise to all societies -- all our political values are based on this -- so we must support those who are fighting for it within their own societies, like in Iraq."

Another common strand for pro-war lefties is disillusionment with the contemporary mainstream left, and especially the anti-war movement Observer editor Roger Alton is unreserved in his dislike for "the vapid old cack that you get from the implacable opponents of the war", and in particular "Tony Benn's spine-chillingly, stomach-churningly disgusting interview with Saddam Hussein".

Columnist for the Independent Nick Cohen divides the anti-war protestors into two groups. The first are "those who just lack imagination -- the actors and so on who can imagine war because they see it on the TV but, because there aren't pictures of the Marsh Arabs or the on-going Iraqi tyranny, they just can't picture themselves in the position of the Iraqi people and they don't realise how few options the Iraqis have." The other group are, he says, "the ones who have become trapped in a cul-de-sac. They're the absolute mirror image of the Americans: whatever the US supports, they oppose. I remember in the eighties, working with Iraqi refugees when it was a big cause of the left, and you had people like [leftwing MP] Jeremy Corbyn [who now opposes sanctions and the war] calling for sanctions against fascist Iraq. But when the US shifted to opposing Iraq in the early 1990s, they mirrored that hypocrisy and dropped the Iraqi exiles too." This wing of the left "has become incredibly conservative, with nothing to offer Iraqis but the brutal status quo." It's because of this that far too few people are campaigning for Iraqi democracy. "Almost nobody," Cohen notes, "is demanding of Blair and Hoon: what kind of Iraq are you fighting for?"

The mainstream left have forgotten the need to vigorously overthrow tyranny and build democracy. This leaves a hole where its positive agenda should be.

As Lloyd explains, "The left now sticks up for anybody who complains. Anybody who resists any change by any government, especially our own [centre-left] governments, is now an honorary part of the left. They've abandoned the idea of lesser evils. Leftism has really become an extreme form of anti-powerism."

His most unreserved contempt is reserved for "the Pilger/Benn left," who "believe that anything any government ever does is bad, because it has downsides. Iraq is just an obvious example of that. It's the belief that all power is corrupt."

Cohen is equally contemptuous of the likes of George Galloway and Benn, who form the spine of the anti-war movement

"Anybody who knows anything about history knows that there is a very dark side to the left," he explains. "It has its own graveyards As soon as you see people like George Galloway and Tony Benn sitting in front of Saddam and asking sycophantic questions, and then you see them come back [to Britain] and attack Iraqi democrats for being stooges of the CIA, you know they are part of a very dangerous left tradition which you see in the Stalinists of the 1930s."

The intellectual genesis of the pro-US-intervention left lies in the events of the 1990s. The twin shocks of the Rwandan genocide and the collapse of Yugoslavia into sectarian murder forced a reconsideration of the position of thinkers like Christopher Hitchens.

Attacking all actions by Western governments as imperialist suddenly seemed hollow, especially in Kosovo, where, as Lloyd explains, "There was nothing to plunder in the former Yugoslavia. It was a barren piece of land filled with people trying to kill each other. The war and the UN presence have been of no financial or strategic benefit to anybody, it's just swallowed lots of money. If the US was really the kind of imperial power that people like [Noam] Chomsky and [John] Pilger imagine, they would never have gone in, and they would certainly have pulled out long ago. When the implications of Kosovo really sank in, it forced many people on the Left to seriously think again about their old assumptions."

Cohen also traces the shift to a change in US foreign policy itself. "From the early 1950s to the mid-1980s, the USA caused as much misery in the world as the Soviet Union. That still isn't properly acknowledged. But since the time of the Contra campaigns, the US doesn't really support tyranny. If you look at what's happening in Venezuela now, thirty years ago the US would have just authorised a coup. Now they won't."

Cohen freely admits the flaws in current US policy -- "The US is not upholding universal values. They won't support the International Criminal Court or Kyoto" -- but adds, "nor is the Left consistently supporting universal values. They won't support their extension to Iraq. They won't even listen to the Iraqi democrats."

Everybody on the pro-war left is taking a huge amount of flak at the moment. My own email inbox is heaving under the weight of all the hate-mail I receive on this issue, and all the others are experiencing the same. (The hundreds of emails from Iraqi exiles explaining that they are bewildered by the anti-war left and are extremely grateful for making the case for the Iraqi people are, admittedly, more than enough compensation.)

Now that so many prominent figures on the left are supporting their comrades in the five-million strong Iraqi exile community, it is no longer accurate to say that the left is anti-war. The left is divided; and at least when all this is over, some of us will be able to defend the reputation of the left as exponents of deposing tyrants and building democracy in the Arab world.

www.bayarea.com Posted on Wed, Feb. 26, 2003 By Juan Forero NEW YORK TIMES

CARACAS, Venezuela - Tankers are once again setting sail loaded with crude oil bound for the United States, while government planners busily try to rebuild and reorganize the state-owned Petroleos de Venezuela, pondering how to function with 40 percent fewer workers.

Oil, the lifeblood of Venezuela, is flowing again after a paralyzing two-month national strike, with production now topping 2 million barrels a day, say officials of the $46 billion-a-year company. They predict that Venezuela's oil industry, with a leaner government-run company leading the way, will soon churn out 3.1 million barrels daily, matching the prestrike level.

"We are getting close to normal," said Enrique Salazar, a loading master on the Caribbean coast, peering from a control room as a tanker, the Morichal, took on 25,000 barrels an hour.

But oil analysts and economists say the government's rosy picture hides a painful truth about a 27-year-old company that was born when Venezuela nationalized oil production and quickly became one of Latin America's more highly regarded multinationals.

Petroleos de Venezuela has lost $4 billion in exports and nearly 16,000 workers, fired by the government for taking part in a walkout aimed at debilitating President Hugo Chavez's left-leaning government. That financial blow and the loss of workers with, on average, 17 years of experience could permanently hobble the company, keeping it from assuming its role as a leading world oil provider, analysts here and abroad say.

"It will not be the company it once was," said Mazhar al-Shereidah, an oil economist in Caracas who helped write oil regulations for the Chavez government. "For a country that depends on petroleum, now more than ever, the challenges are too great. You have to pray for Venezuela."

The dire predictions, if true, would indeed be disastrous for this country of 24 million, which depends on oil for half of government revenues and 80 percent of exports. It would also leave the United States -- which has counted on Venezuelan oil for decades -- without one of its most reliable suppliers as war with oil-rich Iraq promises to batter energy markets.

The obstacles in the aftermath of the strike, which ended in early February, are daunting. A lack of maintenance has caused sand to build up in the gelatinous deposits and the pressure to drop, making some fields worthless and threatening to cut production capacity by 300,000 or more barrels a day. And perhaps most troubling is that no one knows what Chavez's government has in store, though it has promised a wholesale revamping of what was once the world's second-largest oil company.

Reports from international analysts are blistering. UBS Warburg predicts that oil's contribution to gross domestic product will fall 22 percent this year, with Venezuela facing "a fiscal crisis of major proportions." Fitch Ratings says Venezuela's "image as a reliable crude oil supplier has been undermined" and will be hard to recover.

Analysts say the lack of technical expertise and the company's financial straits mean that Petroleos de Venezuela will be unable, in the short term, to reach prestrike production levels, when Venezuela was the world's fifth-largest oil exporter. Most recent production has been in fields that were easiest to restart, leading independent analysts to predict that Venezuela will, at best, produce 2.3 million barrels daily by the end of this year.

"We believe the company's role in Venezuela society has been permanently altered," Deutsche Bank recently reported. Assuming average daily production of 1.7 million barrels for the year, the bank estimated that oil revenues would reach only $14.1 billion, down nearly 50 percent from 2001.

The government is already preparing for the worst. The 2003 budget for the oil company was cut by $2.7 billion, to about $6 billion, while the income the government draws from oil is forecast by UBS Warburg to fall from $11.5 billion in 2002 to as little as $5 billion this year. The sharp drop will make it especially difficult to raise the $5 billion the company would have spent to keep production steady.

Ali Rodriguez, the former leftist guerrilla who is now president of Petroleos de Venezuela, does not gloss over the obstacles. But in an interview, Rodriguez said the doomsday predictions originate with dissident executives who hoped to undermine international confidence in the oil company to weaken Chavez.

He predicted that through sharp budget and personnel cuts, the company would reach 3.1 million barrels a day. And "with its resources," he said, "it is perfectly possible that it will even surpass that level."

To be sure, the Petroleos de Venezuela now emerging will be a far different company, in both its management and philosophy.

Gone will be the highly autonomous octopus that Rodriguez said functioned with great independence from the state, controlling revenues and influencing oil policies. The new company, taking advantage of some of the world's largest oil deposits outside the Middle East, "must give maximum contribution to the nonpetroleum sector, which is the majority of the people," Rodriguez said.

Still, even inside the gleaming office tower in Caracas where the company is based, the short-term outlook seems dismal as managers pore over financial statements.

"There is no investment, so there is no doubt that the company at this moment is very debilitated," Bernard Mommer, a close adviser to Rodriguez who is helping guide the restructuring, said in an interview. "Up ahead, we are going to have problems like how to recover the quality of the company."

Venezuela will benefit little from the higher world oil prices projected in coming months, since production capacity remains limited. By the time Petroleos de Venezuela is producing close to 3 million barrels daily -- if it ever does -- prices are likely to have stabilized, analysts say.

In the meantime, Rodriguez and his managers are busy splitting the company into three divisions: a natural gas branch that would develop the largest deposits in Latin America, and companies in the east and west intended to make obsolete the executive offices in Caracas, where antigovernment activities percolated.

Venezuela may also unload foreign assets, like refineries in the United States that operate under the Citgo chain, which is wholly owned by Petroleos de Venezuela, and other installations in Europe and the Caribbean.

Publicly, officials deny the companies are for sale. But Mommer said Citgo remained overly expensive while providing scant returns.

"The sophisticated part of our business, refining, that's not our business," Mommer said. "Exploration and production, that is where the big money is."

Such a sale would "dismember" the company, warned Jose Toro Hardy, an influential former board member, because Citgo refineries are specially outfitted to process Venezuela's particularly gummy brand of heavy crude.

"There are few refineries in the world that can refine" this crude, Toro Hardy explained. "Without Citgo, Venezuela's heavy oil would lose value."

Oil analysts warn that the company will be debilitated for years from the loss of experienced workers. Those employees -- executives, office workers, engineers and highly trained technicians -- joined the walkout and, in some cases, damaged computers and software and stole files to hinder reactivation efforts.

Chavez, who has referred to the employees as traitors and fascists, has promised that they will not be rehired.

But already, oil analysts say, the shortage of experienced workers is being felt in every corner of the company. In the patents and technology department, which develops technology for exploration and refining, 800 were fired. The department that trains executives has lost hundreds, as has the crucial commercialization department, which contracts with oil purchasers.

"Even if you replace the bodies, you don't replace institutional memories," said Larry Goldstein, president of the Petroleum Industry Research Foundation, an industry-supported analysis group in New York. "It's a hidden loss. You can't touch it or taste it, but it's there."

www.news4jax.com Posted: 10:41 a.m. EST February 26, 2003

TALLAHASSEE, Fla. -- Big Oil representatives are telling Attorney General Charlie Crist that the threat of war with Iraq, a two-month strike in Venezuela and a cold winter are driving would gas prices up.

Crist questioned officials from six companies yesterday, asking for an explanation of how pricing works in the petroleum industry. It's part of a general, but so far informal, inquiry into why gas prices in Florida have risen to their highest February level ever.

Crist says his office has gotten 176 complaints from Florida residents in the last week about the rising cost of gas at the pumps. He says the oil companies cite international pressures on the price of crude oil that are beyond their control.

Crist says he's not suggesting government interfere with the setting of prices on the gasoline market. He says he's only trying to see if there are any violations of antitrust laws.

Crist also was on a conference call Tuesday with 10 other attorneys general from around the country and Federal Trade Commission Chairman Timothy Muris, discussing the rising cost of gasoline.