www.vheadline.com Posted: Friday, February 28, 2003 By: Robert Rudnicki

According to Brazilian Foreign Minister Celso Amorim the Friends of Venezuela group made up of Brazil, Chile, Mexico, Spain, Portugal and the United States is set to hold its next meeting on March 10, most probably in Brazil.

However, the Minister ruled out any chance of the group visiting Caracas to assess the situation as had been requested by opposition negotiator Timoteo Zambrano.

Regarding the recent arrest of Venezuelan Federation of Chambers of Commerce & Industry (Fedecamaras) president Carlos Fernandez and the issuing of arrest warrants for several other strike leaders, Amorim said the Brazilian President Luiz Inacio Lula da Silva found the issue difficult to understand, but assumed the warrants had been issued on judicial rather than political grounds.

www.vheadline.com Posted: Friday, February 28, 2003 By: Robert Rudnicki

Organization of American States (OAS) facilitated peace negotiations have once again been suspended at the request of the government, which blames security concerns for the move. Talks were suspended last week due to OAS secretary general Cesar Gaviria's other commitments and were due to restart on Wednesday, but were delayed as opposition supporters marched and protested near the venue for the talks. 

Thursday's session was again canceled as government negotiators as a group of 50 sacked Petroleos de Venezuela (PDVSA) employees gathered outside. 

The international community is calling on the government to advance with the negotiation process, but at the present time this looks difficult, particularly following the arrest of Venezuelan Federation of Chambers of Commerce & Industry (Fedecamaras) president Carlos Fernandez.

sg.biz.yahoo.com Thursday February 27, 11:33 PM

CARACAS -(Dow Jones)- The fiscal contribution of Venezuela's state-owned oil monopoly Petroleos de Venezuela to the state dropped by 75% during the first quarter this year as a result of the strike at the oil behemoth, local paper El Universal reported Thursday.

The loss represents about 936 million bolivars (1$VEB1598) that under normal circumstances would have been given to the state in royalties, the head of the Finance Commission at the National Assembly was quoted as saying. "We've never witnessed a drop of this magnitude before," Rodrigo Cabezas said. Cabezas is a member of the ruling government party. He couldn't be reached for additional comment.

A nationwide strike was joined by the vast majority of PdVSA employees in December last year and crippled oil production and exports. Only during the past few weeks has the oil sector shown signs of recovery. Production is seen at somewhere between 1.5 and 2 million barrels per day while oil exports are hovering at 1.2 to 1.5 million b/d. Venezuela's pre-strike production level was 3 million b/d.

Oil revenue account for 30% of GDP, half of government revenue and 80% of exports revenue. PdVSA is now trying to keep investment plans up by tapping additional money from the Macro Economic Stabilization Fund, or FIEM. The company already withdrew $318 million last week out of the total $1.1 billion it plans to take out of the Fund.

By Fred Pals, Dow Jones Newswires; 58212-5641339; fred.pals@dowjones.com;

www.forbes.com Reuters, 02.28.03, 6:21 AM ET By Tanya Pang and Peg Mackey

SINGAPORE/DUBAI Feb 28 (Reuters) - OPEC is likely to establish a war contingency plan at its March 11 meeting that would suspend oil output quotas once hostilities start, senior officials and OPEC sources said on Friday. But the producer group that dominates world oil trade is very unlikely to lift output restrictions simply to contain prices before the meeting, they said. "The price now is not due to any shortage or fundamentals, its psychological," said one. While no formal proposal is yet in circulation, the sources said ministers are expected to put a plan in place for a temporary suspension of output limits at the Vienna gathering in two weeks' time. "There is no proposal for this yet," Indonesian Energy Minister Purnomo Yusgiantoro told Reuters on Friday. "But people are fully prepared to make up the production if there is no Iraqi oil." OPEC sources said the group probably would leave formal output limits unchanged at 24.5 million barrels per day (bpd) and prepare to suspend limits altogether if war erupts. Also an option is the immediate suspension of quotas at the March 11 gathering in a bid to calm prices in the final days before any war. Despite two production increases in the past two months, the cartel was powerless on Thursday to prevent prices spiking to a 12-year high of nearly $40 a barrel for U.S. crude. Speculators pushed prices to post-Gulf War highs as the run-up to military action against Iraq coincided with a slump in inventories of crude and products in the United States during a bout of very cold winter weather. U.S. crude on Friday traded at $37.36, up 16 cents. OPEC's March meeting, scheduled months ago, comes just days before Britain and the United States hope for a vote on a second resolution at the United Nations authorising war on Iraq. Some in the group with no spare capacity are reluctant to give free rein to Saudi Arabia, the only country with significant volumes of unused capacity. But all will want to avoid the need for a release of consumer country strategic stocks, controlled by the Paris-based International Energy Agency. The IEA, along with its most powerful member the United States, has said it will give OPEC the chance to fill any Iraqi stoppage. The group is already stretched, compensating for shortages from strike-hit Venezuela. Both the IEA and the U.S. Department of Energy have said they will wait to judge whether OPEC can handle an outage in war before they decide to release emergency reserves. Washington has the right to release reserves unilaterally from the stocks it holds above the 90-day minimum of forward supply required by IEA rules. The vast U.S. Strategic Petroleum Reserve holds about another 50 days of supply. Even with a free-for-all, OPEC does not have much extra oil to deliver -- little more than Iraq's 1.7 million bpd of exports. With only Saudi Arabia having access to significant extra volumes, actual cartel supplies will depend on how much more Riyadh decides to pump. Many independent analysts estimate the Saudis are already producing a million barrels a day more than their official 7.96 million bpd quota. That leaves it with 1.5 million bpd to spare, with the UAE able to call on a few hundred thousand barrels a day.

www.vheadline.com Posted: Friday, February 28, 2003 By: Robert Rudnicki

The United States State Department has told senior Venezuelan officials that it now sees Venezuela as an unreliable supplier of petroleum and expressed serious doubts over political unrest which it believes has caused Venezuela's reliability to come into question. 

State Department spokesman Charles Barclay said the Venezuelan government would have to settle its differences with the opposition and reach an agreement to end the current unrest before Venezuela could once again be seen as a reliable supplier ... "a constitutional, democratic, peaceful and electoral" solution must be found. 

The comments came as Petroleos de Venezuela (PDVSA) president Ali Rodriguez Araque and Energy & Mines (MEM) Minister Rafael Ramirez were visiting the Washington to assure the US government that it can rely on Venezuela to lift its oil supply should war on Iraq force prices higher.