reuters.com Thu February 27, 2003 05:47 AM ET By Ellie Tzortzi

VIENNA (Reuters) - OPEC said Thursday it could cover any stoppage of Iraqi oil during war without the need for consumer countries to release emergency reserves.

"Yes, we are confident we can manage the situation given the level of production in Iraq," cartel secretary-general Alvaro Silva told reporters at a news conference at OPEC headquarters.

"OPEC has been managing the case of Iraq for more than 10 years. We will try to alleviate the situation in the normal way and meet our commitment to stabilize the market."

Silva said the producer group was already pumping beyond official output limits but could not stop speculators driving oil prices higher.

Speaking as U.S. oil prices set a post-Gulf war high of $38.66 a barrel, he said: "This is not a problem of oil in the market, it is a problem of speculation."

"We put 2.8 million barrels a day more in the market in December and January and you can see the result," he said of extra OPEC output.

Industrialized consumer nations have yet to decide whether or not they will release crude from emergency stockpiles, should the United States launch an attack against Baghdad.

OPEC is hoping it has convinced the Paris-based International Energy Agency, which controls the reserves, that a repeat of its 1991 Gulf War emergency release will not be required.

OPEC says it has the capacity to fill any shortage from Iraq, as well as compensate for shortfalls from Venezuela, where a strike is in its 12th week.

Silva said OPEC had another four million barrels a day of spare supply ready to call on, easily enough to cover Baghdad's 1.7 million bpd of exports.

But with leading OPEC member Saudi Arabia already thought pumping nine million of its available 10.5 million bpd, independent experts put spare supply in the cartel at little more than two million.

OPEC meets on March 11 and is expected to leave official supply quotas unchanged.

Delegates have said it may suspend quotas altogether during the period of any war although Silva played down that possibility.

"It is not an issue of suspending quotas. The quotas have been functioning well," he said.

"But of course in the case of catastrophe that's another question. Nobody knows the result of a war."

www.pandct.com 27/02/03

BP announced today that it has agreed to transfer to Perenco its interests in two Venezuelan production assets for $160 million in a cash transaction. The interests are a 60 per cent stake in the Boqueron field in eastern Venezuela and 100 per cent in the DZO (Desarrollo Zulia Occidental) field in the west of the country. BP currently operates both fields. BP's share of production from these fields averaged 26,100 barrels of oil a day in 2002. The deal is subject to approval from PDVSA. This transaction follows a number of recent disposals that BP has made in other parts of the world, including the sale of several UK Southern North Sea gas production assets to Perenco. This deal will strengthen Perenco's overall position in Venezuela.

www.suntimes.com February 27, 2003 BY TAMMY WILLIAMSON Business Reporter

When it comes to your gas bill, March isn't just going to come in like a lion. It's going to bite like one.

Fuel prices are rising amid a pending war against Iraq and striking oil workers in Venezuela. March is shaping up to be the most expensive heating month of all winter, based on local companies' regulatory filings.

That's unusual--typically, during a winter heating season, prices are highest in January and February, because it's coldest and demand is highest.

"There isn't just one thing that is driving" the increases, said Dave Wiers, an energy consultant with Sieben Energy Associates.

The nation's spot oil prices this week jumped to the highest point seen in years following a government prediction that the first two weeks of March are expected to be colder than normal, he said.

Here's how all of this will hit your pocketbook in March:

• Nicor Gas customers will pay about 64 cents per therm, the highest price for natural gas those customers have paid in two years. That's also a 16 percent increase over February.

• Peoples Gas customers will pay 55.49 cents per therm, a nearly 9 percent increase from this month and the highest per-therm rate since June 2000.

• Customers of North Shore Gas, a sister company to Peoples, will pay 56 cents per therm, an 11 percent increase from February.

Those prices are for the commodity and are passed along to customers without a markup, under Illinois law. The cost of distribution of gas is unchanged, and that is affected by how much gas is used.

Other factors are conspiring to drive up fuel prices.

This winter has been 29 percent colder than a year ago in the areas of the country that mainly use natural gas for heating--the Midwest, the Mid-Atlantic and the Northeast, according to the Natural Gas Supply Association, an industry trade group.

That has drawn down natural gas supplies more quickly than experts predicted at the beginning of winter.

A potential war with Iraq is driving oil prices, and natural gas prices tend to follow oil because sometimes natural gas is a replacement for some oil, Weirs said.

Peoples and Nicor do buy some gas in the summertime and draw down from storage as demand requires it. As supply dwindles, the utilities are faced with the cost of replacing the gas. And to a limited extent, gas companies buy gas supplies on the spot markets, too.

"It's safe to say, we're looking at higher gas prices for some time," said Nicor spokesman Don Ingle. "There's a lot of factors making us nervous."

Ingle said Nicor is encouraging customers to take advantage of its budget billing plan, which averages bills over 12 months. It also sets up payment plans for customers who have fallen behind on their bills, he said.

www.vheadline.com Posted: Thursday, February 27, 2003 By: Robert Rudnicki

Venezuelan security forces have stepped up security measures at embassies and diplomatic missions across Caracas following the explosion of two bombs, at the Spanish Embassy and the Colombian Consulate in Caracas earlier this week.

National Guard (GN) and federal agents have been posted outside diplomatic missions and security forces have advanced investigations into the bombings in a bid to uncover evidence that may lead to the capture of the culprits.

According to Deputy Foreign (MRE) Minister Arevelo Mendez, the Colombian government is sending its own team to investigate the explosion, but its scope will be limited to the site of the Consulate.  "The Colombian government is going to send a team to internally investigate the consulate building hit by the explosion ... but so far we haven't discussed collaborating."

www.vheadline.com Posted: Thursday, February 27, 2003 By: Robert Rudnicki

The Caracas Stock Index (IBC) rose by 2.05% or Bs.163.57 points to 8,149.66 in strong trading.

The Industrial Index fell 62.28 points to 6,924.68 and the Financial Index added 831.53 to 14,305.98.

A total of Bs.1.9 billion worth of stocks were traded in 54 transactions as two stocks rose, four fell and 13 traded flat.

The bulk of trading centered on Mercantil Servicios B, which ended flat on Bs.1,300.00.

CANTV fell Bs.10.25 to Bs.2,350.00 and Electricidad de Caracas lost Bs.3.95 to Bs.151.05.  Banco Provincial led the market higher, rising Bs.86.90 to Bs.394.90.