www.smh.com.au March 4 2003

OPEC, supplier of a third of the world's oil, may struggle to replace output from Iraq should that nation's exports be halted by a war because most members are pumping near their limit, analysts said.

Oil prices have surged 63 per cent in the past year and last week approached $US40, the highest since the 1990-91 Gulf War, after US inventories fell to among the lowest level in three decades. Should an attack disrupt Iraqi supply, oil importers will have to tap emergency reserves to prevent soaring prices, analysts said.

"The problem is OPEC is getting close to the limit of what it can do," said Julian Lee, a senior analyst at the Centre for Global Energy Studies in London, a think tank founded by former Saudi oil minister Sheikh Zaki Yamani. "Prices aren't going to come down much until US inventories start to rise."

Analysts put OPEC's spare capacity at about 2 million barrels a day, equal to 2.6 per cent of world output and less than Iraq's daily output of 2.5 million barrels. Two million barrels is enough to meet daily demand in France, the world's fifth-largest economy.

OPEC members, except Iraq, agree to restrain oil supply to boost prices. They increased quotas twice this year to fill a shortage caused by a strike in Venezuela and after a colder-than-normal winter boosted demand for heating fuel.

In 2000 OPEC neared the limits of its spare capacity after the group raised production quotas and US prices surged to more than $US37 in September of that year. The present situation is similar, analysts said.

"If war starts with Iraq, there will have to be a significant release from the strategic reserves in the US to avoid an economic catastrophe," said Adam Sieminski, an oil strategist at Deutsche Bank.

The US and other industrialised countries hold inventories to alleviate supply shortages, reserves built to avert a repeat of the shortages seen during the 1973 Arab oil embargo. US Energy Secretary Spencer Abraham has said the nation may use its 600 million-barrel strategic reserve to offset any "severe" disruption in supply.

A recovery in OPEC's oil capacity depends in part on Venezuela. Production in the South American country has risen to 2 million barrels a day, the Government said. That is still two-thirds of output levels last November.

No consensus has emerged from OPEC on what steps to take on March 11, when oil ministers meet in Vienna to set policy for the second quarter. At that time, oil demand normally slows because of the northern hemisphere spring.

"We acknowledge that there's a shortage in the US," said OPEC President Abdullah bin Hamad al-Attiyah, who is also the oil minister for Qatar. "There's a lot of oil in the middle of the sea heading to the Gulf coast and we are still not sure yet whether that will be sufficient."

OPEC Secretary-General Alvaro Silva said current supply was equal to demand, while oil officials from Kuwait and Qatar said last week the group may raise output. Other officials have said output quotas will be lifted entirely should Iraq's exports be cut off.

JP Morgan Chase estimates OPEC could muster another 2 million barrels a day, largely from Saudi Arabia and the United Arab Emirates.

"OPEC is irrelevant at the moment," said Lawrence Eagles, an analyst at GNI-Man Financial in Belfast, Northern Ireland. "Now, there's only one country that counts, Saudi Arabia."

Saudi Arabia may already be pumping 9 million barrels a day, Mr Eagles and other analysts said. The kingdom says it can raise output to 10.5 million barrels a day within 90 days.

The International Energy Agency is likely to tap inventories in the event of a war on Iraq, the group's executive director said. The IEA coordinates the use of government oil reserves in the US and 25 industrialised nations.

A stockpile release is "likely but not certain" should Iraq be attacked, the agency's executive director, Claude Mandil, said. He was "confident" OPEC would be first to take steps by raising output.

Bloomberg

business-times.asia1.com.sg By VEN SREENIVASAN

SINGAPORE - Keppel Corp was the star performer in an otherwise lethargic market today, as investors warily watched the latest twists and turns in the unfolding Iraq drama.

The stock of the marine conglomerate shot to $4.43 before closing a net 14 cents lower at $4.28 ¡Âú its highest level since mid-November 2002 ¡Âú as players focused on companies that promise stability, growth, value and yield amid increasing geopolitical and economic uncertainty.

Keppel Corp's stock has gained more than 10 per cent in the past three sessions.

The Straits Times Index kicked off this week on a bright note, hitting 1,291.75 before late profit-taking pared it to a close of 1,279.2 ¡Âú a net gain of 5.35 points.

But despite the positive top-line indicator, the broad market was less than effervescent.

Volume was modest, with about 333 million Singapore dollar-denominated units worth some $229 million changing hands as gainers led losers 129-82 and 348 counters closed unchanged or weren't traded.

Venture Corp, which once more has delivered in terms of earnings, was the top gainer, rising 50 cents to $13.90. Last week, the contract manufacturer delighted investors by posting a stronger-than-expected 35 jump in net earnings to $181 million on a 65 per cent rise in revenue to $2.4 billion.

Not surprisingly, Venture's proven ability to do well despite tough conditions has prompted a slew of ""out-perform'' calls on its stock, with fair value ranging from $16 to $18.

Other notable blue chip gainers today included Singapore Airlines, which added 15 cents to $9.60, and Creative Technology, which was up 20 cents to $11.20.

The stock of Neptune Orient Lines eked out a 1.5-cent gain to 90.5 cents after the company announced that it has won a seven-year contract worth US$220 million to transport fuel from Venezuela to Singapore. But the deal will not help NOL's earnings in the current financial year.

Among small caps, Citiraya was in the limelight.

The stock of the electronic components recycling specialist topped the actives list with almost 22 million units changing hands as it gained 3.5 cents to 54.5 cents on speculation that the strong gold price will boost the firm's bottom line. Gold is a by-product of Citiraya's recycling activity.

Surface Mount Technology (SMT) was also actively traded, following a visit by analysts to its China operation. The stock edged up a cent to 52.5 cents as some 3.7 million units changed hands.

Research house Kim Eng sounded an upbeat note on SMT after visiting the company's Dongguan plant. In an on-line report, the local broker said SMT is poised for strong growth: ""All factories remain fully utilised ¡Âú even the four newly added lines over the past six months,'' Kim Eng said. ""It appears that the group's production ramp is on track to make another record year.''

Going forward, geopolitical concerns are likely to continue to dictate sentiment and the direction of equity markets.

Indeed, rises in Japan, Hong Kong, Taiwan and Sydney today were largely seen as a reaction to a perceived fall in the risk of war in Iraq.

Baghdad's decision to dismantle its Al-samoud missiles, Turkey's refusal to host US ground troops for an invasion, calls by some Arab nations for Saddam Hussein to step down and strident opposition to US-led military action by France and other United Nations Security Council members are seen as key factors weighing against an attack on Iraq for the time being.

But all this could change come Friday, when UN Chief Weapons Inspector Hans Blix reports to the Security Council.

In the meantime, the market is expected to gyrate between hope and fear.

Analysts expect the ST index to remain largely range-bound between resistance at 1,280-1,290 and support at 1,260-1,270 as the focus remains largely on short-term situational plays.

news.bbc.co.uk

About 300 people held a "masked chorus of disapproval" in London

Stage actors across the globe are holding an international protest against a possible war with Iraq.

A series of readings of Aristophanes' anti-war comedy Lysistrata is being held in more than 900 venues in 56 countries on Monday, say the organisers.

Richard Wilson, Joseph Fiennes and Lindsay Duncan were among 300 people who wore Greek-style masks to stage a three-minute silence in London's Parliament Square, before reading an extract from the play.

Aristophanes set the work in ancient Greece, where women withhold sex until the men agree to outlaw war.

'Magic moment'

Organisers have described the Lysistrata Project as the biggest act of dissent ever made in the theatre world.

It was first thought of in New York in early January by two actresses, Kathryn Blume and Sharron Bower.

Blume was working on a modern adaptation of Lysistrata as a screenplay, when she heard about a group called Theaters Against War.

They were urging theatre companies to put an anti-war statement in their programmes or make a curtain speech against war.

Some of the best actors in Iceland - more than 20 - will take part

Stefan Baldursson National Theatre of Iceland

Blume considered doing a reading of Lysistrata as her contribution and then Bower called to suggest they work together on something.

Blume said: "It was a magic moment in the history of politics and theatre.

"It turned into something very large, very fast."

After they set up a website, e-mails began arriving from all over the world.

Parliament chorus

They say the latest count was heading beyond 919 readings in 56 countries, including Venezuela, China, India and Honduras.

Stefan Baldursson, artistic director of the National Theatre of Iceland, said: "Everyone wants peace and I thought it was good to take part in this.

"Some of the best actors in Iceland - more than 20 - will take part.

There have been mass protests against possible war

"It's a very good and funny translation, too, made directly form the original Greek."

In London, stars such as Susannah York and Sheila Hancock also joined in what organisers described as a "masked chorus of disapproval" in Parliament Square.

A public reading of a version of the Aristophanes comedy is being held at the Pleasance Theatre in Islington later on Monday.

Blume and Bower will be involved behind the scenes at a celebrity-filled production in New York, which includes F Murray Abraham and Kevin Bacon.

A reading in Los Angeles is led by Julie Christie and Eric Stoltz.

It seems now that pretty much everyone knows who we are - they just haven't seen our faces or know our work

Kathryn Blume Co-organiser

In Paloma Blanca Coffeehouse in Questa, New Mexico, the organiser Anne Constanza said: "There is no director. Each reader will bring to the reading whatever they want, in terms of preparedness, props and costumes."

Blume and Bower say they have spent a couple of thousand dollars on the project.

"Sharron and I will both tell you that we came to New York to become megastars.

"That has not happened in the theatrical realm, although it seems now that pretty much everyone knows who we are - they just haven't seen our faces or know our work."

The protest follows similar pleas made by individuals in Hollywood.

Movie stars Kevin Spacey, George Clooney and Sean Penn are among those to speak out against the policy of their president.

(Letter published in Science, Vol. 299, p. 1184, Feb, 21-2003)

The current political crisis in Venezuela threatens to destroy the Venezuelan scientific infrastructure, built up during the past 50 years. During 2002, the Ministry of Science and Technology received only 1/3 of the approved budget and most of the spending was diverted to maintain its bureaucracy. During 2003 the government is actively engaged in a continuous dismantling of scientific research. Specifically it has decided to restructure Intevep, the well known research and development institute of the national oil company PDVSA. On Feb 4, the government expelled over 881 employees from Intevep. This and other hapless decisions, such as the arbitrary imposition of a new law regulating science and technology, containing provisions allowing for authoritarian interference from the central government, undermine the continuity of the modest but high quality scientific activity of Venezuela, which was ranked fifth among Latin American countries.

Likewise, universities are not counting on, or expecting, budgetary resources to guarantee their operation, as even salaries for professors and employees are at risk. The budget for higher education is being cut by 22% in the first semester of 2003, while the bolivar, the local currency, has lost more than half of its value during the past year. With real buying power reduced to about a third of that in 2002, and with free access to foreign currencies blocked by decree, libraries will be unable to maintain subscriptions, and most research will have to be suspended. Such circumstances have been experienced elsewhere in Latin America before. We envision a stampede of scientists to neighboring and developed world countries, a hiatus in the growth of young researchers and the arrest and even disappearance of a research community that has shown moderate but continuous growth over the past five decades.

Although our political crisis will have to be resolved by ourselves, the awareness of our tragedy in the international scientific community might help reduce its devastating effects.

Board of Directors Venezuelan Association for the Advancement of Science - Caracas

Klaus Jaffe kjaffe@usb.ve; Reinaldo Di Polo dipolor@ivic.ve; José Cardier jcardier@mail.ivic.ve; Ricardo Rios rrios@euler.ciens.ucv.ve; Rene Utrera rutrera@usb.ve; Morella Rodriguez mrodri@telcel.net.ve; Luis Briceño Zoppi zoppi753@telcel.net.ve; Ana Maria Rojas nanaro@cantv.net; Alicia Ponte aiponte@reacciun.ve; Benjamin Scharifker benjamin@usb.ve; Manuel Bemporad manolob@cantv.net