www.vheadline.com Posted: Thursday, February 27, 2003 By: Patrick J. O'Donoghue

Basque ex-pat Jose Arturo Cubillas 937) says he is in danger of being spirited out of the country by Spanish secret service agents, even though he has been legally in Venezuela since the Venezuelan and Spanish governments signed an agreement as far back as 1989 to accept ETA separatist movement militants as residents .

Spanish Prime Minister Jose Maria Aznar has sent secret service agents to Venezuela to monitor and harass Cubillas, who confronted one alleged agent that had been tailing him for days.

• The Ombudsman’s Office attempted to get the man’s name but he ran off.

The Spanish Embassy has refused to comment on the matter and Interpol director Israel Galindo is permanently at a meeting. The Venezuelan government’s record on defending ETA militants legally in Venezuela has been cracking after several former militants were extradited in record time.

Basque exiles in Venezuela complain that the State Political & Security (DISIP) Police is actively collaborating with the Spanish in tailing and making life difficult for Basque militants and their families. PROVEA human rights group is taking up Cubillas' case.

www.gmtoday.com By JOHN NEVILLE- GM Today Staff February 27, 2003

These high gas prices don’t  seem close to dropping soon, according to many experts.

OZAUKEE COUNTY - After rush hour Monday evening, a middle-aged man glumly eyed the gas pump readout at the Speedway filling station on Washington Avenue in Cedarburg.

"Damn, I wish they’d figure out what they’re going to do and just do it," he said, topping off the tank of a salt-crusted SUV and zooming off.

With war on hold in the Mideast and the flow of crude oil from Venezuela interrupted by a strike, international instability and several other related factors have driven up prices.

With a gallon of regular gas going for between $1.75 and $1.80 a gallon in southern Ozaukee County, a nationwide trend in rising gas prices has touched off grumbling but none of the public backlash that followed price gouging incidents in the wake of 9-11.

Mike Khaled, owner of the Citgo Free Zone in Grafton, says kvetching about gas prices is nothing new to him.

"They complain the first two or three days after they go up," he says during a spare moment during Tuesday’s lunch hour rush. "They know it’s not our fault but they always complain."

Tom Moore, of the state Agriculture and Trade’s Bureau of Consumer Protection, said Monday that agency hasn’t received any complaints about gas bilking.

A consumer information employee, Moore notes the agency handles price gouging like any other consumer complaints, with an expert in the trade practices division investigating.

"But we haven’t hit the $2 mark yet, fortunately," says Moore, recalling a wave of protests in June 2000 when a gallon of regular throughout most of Wisconsin went slightly above the dreaded $2 ceiling.

Ozaukee County Highway Commissioner Robert Dreblow notes a gallon of discounted gas the county gets has jumped from 90 cents a gallon for regular and 86 cent a gallon for diesel last year to $1.45 a gallon for regular and $1.42 for diesel now.

(The county provides gas to all county agencies, the Shared Ride Taxi service, the city of Port Washington and several small villages and municipalities.)

"Yeah, fuel is expensive. It’s early in the budget year so it’s hard to say we’re getting killed by it but it certainly is something we need to keep an eye on," he adds.

So far Dreblow’s fleet of trucks has had a very mild winter — at least in terms of snowfall.

"It’s not like we’re consuming as much fuel as we would have other years," he notes.

Jim Mueller asserts that service station owners are not making windfall profits from the recent hike in gas prices. Division Sales Manager for Citgo, Mueller makes a convincing argument that station owners are not profiting from the surge in pump prices.

"The market dictates that I’m not able to move my price yet my wholesale goes up," he explains. "So my profits get squeezed. That seems to be the case most of the time but especially when prices are rising."

Mueller spoke from behind the counter at Mequon’s Port Road Citgo, where Tuesday morning a gallon of regular went for $1.74 a gallon with a gallon of diesel for $1.78 a gallon.

Erin Roth, executive director of the Wisconsin Petroleum Council, notes that Wisconsin has several things working against it, including high gasoline taxes and location at the caboose of the Midwest supply pipeline.

"No, we are not lining our pockets with profits," he says. "We are just passing along our additional costs of the raw product."

Roth attributes a more than 100 percent increase in the price of a barrel of crude in one year to several causes: the looming war, a harsh winter in the Northeast states requiring more heating oil and less domestic production of oil.

"But the biggest reason is the unrest in Venezuela. We import over 7 percent of our crude oil from there," he says, noting that the United States imports most of its crude from Canada and Mexico. (Venezuela is third, followed by Saudi Arabia.)

Will oil prices come down this spring?

Probably not, seems to be the short — and most credible — answer.

George Gaspar, managing director of petroleum research at Robert W. Baird & Co. Inc., notes that while prices have gone down slightly in the last week, it’s too early to make predictions.

"Tell me when there’s a war," he says. "Oil is heady in price. The longer we stay away from the war the more opportunity there is going to be for production to build up in the world and start to resupply the huge decline that came about from the 140 million barrels that was not produced by Venezuela during its strike."

Gaspar explains that OPEC is producing "at will" to make up the shortage. He notes that with crude at $37 a barrel on the open market, it’s unlikely that prices will steadily fall anytime soon.

Should war come and the United States and its allies wage a relatively brief, successful war, the outcome might eventually help bring prices down at corner filling stations.

Gaspar thinks seizing Iraqi facilities intact would mean a barrel of crude may come down as much as $5. He says that the Bush administration may release some national strategic oil reserves to take the shock off of the recent increases in gas and heating oil prices.

"If you can protect the refineries and get control of them without super serious damage being imposed on them, that all works into the price of oil," Gaspar notes.

What if the regime of Saddam Hussein puts a match to those refineries?

Gaspar concedes that’s possible, but quickly notes that that scenario was not discussed in that part of the Mideast until recently.

"I think that idea was planted in his mind by the news media," he adds. "Now we may have to live with the consequences of that."

reuters.com Thu February 27, 2003 04:01 PM ET (The following statement was released by the rating agency)

NEW YORK, Feb 27 - Moody's Investors Service confirmed the Ba3 senior implied and senior unsecured long-term ratings of CITGO Petroleum Corporation, concluding a review of those ratings for possible downgrade. The outlook for those ratings remains negative.

At the same time, Moody's assigned a rating of Ba2 with a negative outlook to CITGO's $200 million senior secured Term B Loan. The ratings confirmations reflect CITGO's enhanced liquidity position following the expected completion of three financings totaling $950 million.

The financings will alleviate near-term liquidity stress stemming from the disruptions in crude deliveries under CITGO's long-term crude supply agreements with affiliates of its parent, Petroleos de Venezuela (PDVSA, rated Caa1, developing outlook). They include a $550 million Senior Note issue and a $200 million senior secured three year term loan, together providing $750 million of new cash, and a $200 million accounts receivable facility that will provide replacement funds for a similar recently canceled facility. These funds will help address CITGO's working capital needs, including the impact of shortened payment terms on third party crude purchases and maturing bank letters of credit that will need to be repaid or refinanced.

Moody's also has factored into the ratings the expectation that, to the extent CITGO maintains adequate liquidity for its own internal needs, these financings will provide cash to retire some portion of PDV America's $500 million of senior notes that mature in August 2003. The Ba2 rating for the senior secured loan, which is one notch above CITGO's senior unsecured ratings, reflects the underlying quality of the pipeline assets and liquidity of the stock being provided as collateral to lenders.

The $200 million loan will be secured by CITGO's 15.8% equity stake in Colonial Pipeline Company (rated A2/Prime-1) and 6.8% stake in Explorer Pipeline Company (rated Prime-1), two common carrier product pipelines with stable cash flows and fairly ready equity valuations based on cash flow multiples and other recent transactions. Moody's is maintaining a negative outlook on all the ratings, reflecting continuing uncertainty over the impact of reduced crude production and exports from Venezuela on CITGO's operations and working capital needs, and the possibility that future actions by CITGO to undertake additional secured financings could result in the notching down of its senior unsecured ratings. The rating agency notes that PDV America Inc. continues to be rated Caa1 with a developing outlook.

CITGO's recent financings increase the likelihood that dividends will be available to retire at least a portion of PDV America's $500 million senior notes at maturity. However, the dividend will be subject to CITGO's own liquidity needs, and PDVSA's other cash sources to retire PDV America's debt are uncertain at this time.

CITGO Petroleum Corporation is headquartered in Tulsa, Oklahoma.

www.vheadline.com Posted: Thursday, February 27, 2003 By: Patrick J. O'Donoghue

Mainstream print & broadcast media have been playing down yesterday's Coordinadora Democratica (CD) march in support of fugitive Confederation of Trade Unions (CTV) president, Carlos Ortega and Federation of Chambers of Industry & Commerce (Fedecamaras) president Carlos Fernandez currently under house arrest.

Although the opposition has been slow to supply march estimates, the size of the march was lower than organizers expected.

Starting from Petroleos de Venezuela (PDVSA) HQ in Chuao, anti-government supporters marched to Fedecamaras HQ where they were addressed by  the business sector deputy president, Albis Munoz and former Fedecamaras presidents.

The march avoided clashing with government supporters holed up at PDVSA offices in La Campina and ended in front of the CTV HQ where CTV general secretary, Manuel Cova accused the government of political ly persecuting Carlos Ortega ... calling Carlos Fernandez and rebel National Guard (GN) General Carlos Alfonzo Martinez “political prisoners.”

• Among politicos heading the march were Miranda State Governor and potential presidential candidate Enrique Mendoza, Enrique Naime, Cesar Perez Vivas, Alfredo Ramos, Rafael Narvaez, and Antonio Ledezma.

Former Libertador Mayor Ledezma challenged other opposition leaders, who did not turn up for the march, to get back out on to the streets and fight with “El Pueblo” and urged wannabe presidential candidates to drop their aspirations for a greater cause, namely opposition unity.

reuters.com Thu February 27, 2003 03:57 PM ET By Pascal Fletcher

CARACAS, Venezuela, Feb 27 (Reuters) - An opposition strike against President Hugo Chavez has cost Venezuela's oil-reliant economy an estimated $7.6 billion in lost production and fiscal revenues, inflicting severe, long-term damage, the Finance Ministry said.

In a grim report on what it called the strike's "economic sabotage," the ministry said the stoppage that began Dec. 2 and fizzled out early this month had also closed down businesses, caused shortages of goods, hiked prices, reduced salaries and destroyed jobs.

"The damages caused are severe and long-term ... they will permanently affect the whole population," said the report by Finance Minister Tobias Nobrega, which reviewed the 2002 year but included a summary of the effects of the strike.

The report was sent to Reuters in Caracas on Thursday.

The strike, called to try to force left-winger Chavez to resign and hold early elections, sharply cut back oil production and shipments by the world's No. 5 oil exporter, forcing the government to slash spending and introduce foreign exchange and price controls earlier this month.

Nobrega's report estimated total loss of production in the economy caused by the strike at 9.9 trillion bolivars ($6.2 billion using the government's fixed exchange rate of 1,600 bolivars to the U.S. dollar that was introduced Feb. 6).

Of this lost production, 4.3 trillion bolivars ($2.7 billion) corresponded to the oil sector and 5.6 trillion bolivars ($3.5 billion) to the non-oil sector.

In addition, loss of fiscal income for the government as a result of the strike was estimated at 2.2 trillion bolivars ($1.4 billion). Oil exports normally account for around half of total government revenues.

BLEAK RECOVERY PROSPECTS

The effects of the strike are still being felt in the strategic oil sector, where the government has sacked more than 13,000 striking employees of the state oil giant PDVSA. It says it has restored oil output to just over 2 million barrels per day (bpd), about two-thirds of pre-strike levels.

Oil strikers put output at around 1.58 million bpd.

Energy Minister Rafael Ramirez said in Washington on Thursday the government hoped production would be approaching its pre-strike level of 3.1 million bpd by the end of March.

Condemning the strike as an "act of economic irrationality," Nobrega's report said its impact would severely constrain Venezuela's recovery prospects in 2003.

The economy shrank 8.9 percent in 2002, according to the government. Economists and analysts polled by Reuters this month predicted a sharper contraction this year of more than 13 percent. The poll saw inflation rising to 42.8 percent in 2003 from 31.2 percent last year.

Negotiations between Chavez's government and its political opponents have so far failed to produce an agreement on early elections to solve the long-running and often violent feud that has shattered investor confidence in Venezuela.

Tensions have risen again this month after authorities last week arrested one of the alleged strike leaders, business chief Carlos Fernandez. He is under house arrest facing rebellion charges and arrest orders have been issued for other alleged ringleaders of the opposition stoppage.

Bomb blasts badly damaged Spanish and Colombian diplomatic buildings in Caracas early on Tuesday after Chavez accused Spain, Colombia and the United States of meddling in his country's political crisis.

Citing a deterioration in the political climate, investment banks Merril Lynch and Credit Suisse First Boston this week downgraded their recommendations on Venezuelan sovereign bonds.

The Finance Ministry report said Venezuela's foreign debt at the end of 2002 stood at $22.3 billion, a 1.16 percent decrease from the previous year.