www.wilmingtonstar.com Last changed: March 09. 2003 4:11PM By BRUCE STANLEY AP Business Writer

Whatever OPEC decides to do this week, its representatives won't have their usual influence on oil prices when they meet to review the group's output quotas for crude, analysts say. Members of the Organization of Petroleum Exporting Countries are already pumping at or near their full production capacity, as worsening fears of a U.S.-led war on Iraq have pushed prices to 12-year highs. A conflict would almost certainly cut off Iraq's crude exports, currently totaling about 2 million barrels a day. With Venezuela's oil exports still recovering from a strike, OPEC would be hard-pressed also to cover a shortfall in Iraqi shipments. "That's one of the reasons now why the market is so incredibly nervous," said Orrin Middleton, an energy analyst at Barclays Capital. "The real problem is how much can OPEC really do?" OPEC supplies about a third of the world's oil, but some analysts estimate it has only 1.4 million barrels a day in readily available spare capacity. The United States and other large importing countries are now coordinating plans to tap into their strategic petroleum reserves as the ultimate cushion against a major supply disruption, should fighting erupt in Iraq. OPEC, whose delegates meet on Tuesday in Vienna, Austria, can help by suspending its formal production quotas and producing flat out. But at the moment, analysts say international politics has robbed the cartel of much of its influence. "For once OPEC is in the back seat, looking out the window. The U.S. is in the front seat, driving the war wagon," said Leo Drollas, chief economist at the Center for Global Energy Studies. When OPEC oil ministers last met two months ago, they decided to increase the group's production target by 6.5 percent to 24.5 million barrels a day, in the hope of keeping prices at or below $28 a barrel. Prices have climbed steadily since then. On Feb. 27, futures contracts of U.S. light, sweet crude spiked to a post-Gulf War high of $39.99 a barrel in New York. April contracts of U.S. crude were trading Friday at $37.30 a barrel, while Brent futures for April delivery were at $33.75 in London. OPEC's members are cashing in on these high prices by pumping well above their official quotas. In February, the group's 10 members excluding Iraq produced 24.7 million barrels a day, according to a Dow Jones Newswires survey. Iraq doesn't participate in OPEC's production agreements because the United Nations oversees its exports. Energy Secretary Spencer Abraham and Claude Mandil, executive director of the International Energy Agency, expressed gratitude Friday for OPEC's willingness to bust its own quotas. The agency is the energy watchdog for the Organization for Economic Cooperation and Development, a club of rich oil-importing nations. "The U.S. government and IEA appreciate the actions of producer nations, which have already increased production to mitigate the effects of the Venezuelan disruption," Abraham and Mandil said in a joint communique issued at the agency's headquarters in Paris. "In light of tight markets, we also appreciate producers' willingness to increase production if necessary to address any further supply disruption." Mandil has consulted recently with officials at OPEC's headquarters in Vienna, in a sign of closer cooperation between importing countries and the cartel. Abraham planned to visit the city Tuesday on separate business and indicated that he might seek talks with key oil ministers. Some analysts suggested that major importers and OPEC - two often adversarial camps - might be hatching a deal aimed at heading off a war-induced disruption in supply. "This is not a time for volume control. This is a moment for OPEC to be a good global citizen," said Peter Gignoux, managing director of the petroleum desk at Salomon Smith Barney. OPEC, led by Saudi Arabia, dreads a release of crude from importers' strategic reserves because such a step would reduce the cartel's control over supplies. After meeting with Mandil on Thursday, Saudi Arabian Oil Minister Ali Naimi said that the IEA agreed producers should exhaust their spare capacity before importing countries resort to tapping into their reserves, OPEC's news service reported. Mandil and Abraham appeared to confirm this joint strategy. Washington and its IEA partners "reaffirmed their commitment to make additional volumes of oil available to the market to reinforce producers' efforts if needed," they said. IEA countries have 4 billion barrels of strategic crude reserves. The United States accounts for 600 million barrels of that total, enough to cover 39 days of imports in case of a complete halt in foreign supplies. Some analysts urged importing countries to release oil from their reserves even before a war, to forestall a supply shortage or another spike in prices. "In fact they should do it now," Drollas said, "before anything happens, because it takes time for the stuff to come through the system."

www.vheadline.com Posted: Sunday, March 09, 2003 By: Patrick J. O'Donoghue

Indigenous National deputy Noehli Pocaterra has announced that the government’s special food supply program will target Warao indians that migrate from eastern Venezuela to Caracas to beg for food.

“The idea is to help the Indians set up allotments where families can grow vegetables, beans and roots … we hope the program will help them improve their standard of living and stop them from migrating to the cities.”

The Agriculture & Lands Ministry (MAT) and Banco de Desarrollo (Bandes) have confirmed that they are drawing up economic projects for indigenous communities.

www.brazzil.com

Colombia wants Brazil to classify the FARC as a terrorist group, freeze its bank accounts in Brazil and detain any of its members or supporters in Brazilian territory. In a recent meeting between the two governments, though, this topic was not even raised.

John Fitzpatrick

None of Brazil's neighbours has suffered as much as Colombia, which has experienced a savage guerrilla war for more than 30 years. This war has cost thousands of lives and has involved a variety of left-wing guerrillas groups, right-wing paramilitaries and the security forces of the Colombian state. Countless peace talks have been held, but the main guerrilla group, called the FARC, has never abided by agreements and continued with its campaigns, killing civilian and soldiers, Colombians and foreigners alike. The FARC is estimated to have around 30,000 armed men and occupies a huge part of the country ceded to it by the previous government. It routinely kidnaps people and has recently extended its operations into the cities with deadly effect.

Most of its operations are funded by the drugs trade, which inflicts misery on the lives of millions, including Brazilians. It should be recalled that Brazil's most infamous criminal, known as Beira Mar, was extradited from Colombia, where he spent much time, to Brazil. Drug gang lords in Brazil are becoming as daring as the Colombian guerrillas and their writ is law in their fiefs. Not only do they terrorize the favela shanty towns, where they are based, but they have also shown they can bring business in large parts of Rio de Janeiro to a halt.

The conflict in Colombia is relevant to Brazil but, so far, the government of President Luiz Inácio Lula da Silva (like that of his predecessor, Fernando Henrique Cardoso) has done little to try and end it. Lula's attitude has been that of a driver who stops at the scene of a terrible road accident, shakes his head ruefully and drives on.

This week, the recently elected president of Colombia, Alvaro Uribe, held a meeting in Brasília with Lula and some of his ministers. Afterwards they announced an agreement on combating drug trafficking and the arms trade in their border area. Talks will also be held on allowing Colombia access to information from the Brazilian government's SIVAM high-tech security system covering the Amazon region.

This sounds good on paper, but the Colombians left for home frustrated at the Brazilian government's refusal to take measure, which the Colombians believe would bring more concrete results. The Colombians want Brazil to classify the FARC as a terrorist group, freeze its bank accounts in Brazil and detain any of its members or supporters in Brazilian territory. In fact, according to the local press, this topic was not even raised at the meeting.

One assumes the Colombians knew they were fighting a lost cause and wished to be diplomatic. Of course, the fact that it was not on the official agenda did not mean that the Brazilian, as hosts, could not have raised it. There was little chance of this since the Brazilian foreign minister, Celso Amorim, in one of the most absurd explanations imaginable, had said a few days earlier that Brazil did not have a list of prescribed terrorist groups and, therefore, could not add the FARC to it. Using weasel words while people's lives are at risk has always been the diplomatic way and Amorim was following in the long tradition of the Brazilian diplomatic corps.

Another ludicrous statement from one of Lula's advisers was that if Brazil were to call the FARC a terrorist group this could compromise any future role for the country as an intermediary. Instead of stating such nonsense, why does Brazil not offer to host talks, if it believes in peace, or start cracking down on guerrilla activities in its territory to show that it will not just stand by and watch this threat to regional security and democracy continue? The lack of action over Colombia compares with the flurry of activity at the start of the year when Brazil announced its support for Venezuela's besieged President Hugo Chavez and even sent technicians to break a strike in the oil industry.

There is a faction within the PT which regards the FARC as a progressive force fighting for social justice. The fact that the Americans have been helping the Colombians with arms, equipment and advisers makes these PT radicals mistrust any Colombian government and allows them to turn a blind eye to guerrilla atrocities. The U.S. has a list of proscribed terrorist groups and, in the views of these leftists, this is another reason for Brazil not to have such a list. Paradoxically, it is this very ideological aspect which could bring about a solution. If the FARC is an organization fighting for social justice why, then, does it not ask Brazil, under the impeccably left-wing Lula, to try and broker a solution? And why, instead of complaining, do the PT radicals not also try and use their influence with the FARC to get peace talks started? The answer is simple: the FARC is not interested in peace talks or social justice but only in maintaining its own power. Trying to broker any deal would be a nightmare, just as cleaning up the mess after a car crash, but it would be to Brazil's credit if it tried.

John Fitzpatrick is a Scottish journalist who first visited Brazil in 1987 and has lived in São Paulo since 1995. He writes on politics and finance and runs his own company, Celtic Comunicações—  www.celt.com.br, which specializes in editorial and translation services for Brazilian and foreign clients. You can reach him at jf@celt.com.br

© John Fitzpatrick 2003

You can also read John Fitzpatrick's articles in Infobrazil, at www.infobrazil.com

www.vheadline.com Posted: Sunday, March 09, 2003 By: Patrick J. O'Donoghue

Las Ultimas Noticias reports that files on three former State Political & Security (DISIP) Police agents stored at the State Identification & Passport Office (Oni-Dex) have mysteriously disappeared.

• According to the tabloid, the three men are top suspects of carrying out the bomb attacks on the Spanish Embassy and Colombian consulate.

Two other former senior DISIP chiefs, who were dismissed for taking part in the April 11 coup attempt against President Hugo Chavez Frias’ government and supporting Dictator-for-a Day Pedro Carmona Estanga, are also said to be under government investigation for the latest destabilization efforts to oust the administration.

news.ft.com By Carola Hoyos in Vienna Published: March 9 2003 19:39 | Last Updated: March 9 2003 19:39

The Organisation of Petroleum Exporting Countries will meet this week for what could be its last gathering before war, but doubts persist over whether the oil cartel has the ability to bring the crude price back from its historic highs before it damages the world's fragile recovery.

Oil prices have risen by almost 60 per cent since the middle of last year to nearly $40 a barrel in recent weeks - a level not seen since the 1991 Gulf war.

For Saudi Arabia, the world's largest crude supplier, Tuesday's meeting is a chance to heal the injuries to its relationship with Washington caused by the fact that 15 of the 19 hijackers on September 11 2001 were Saudis. Ali Naimi, Saudi Arabia's oil minister, may meet Paul Abraham, his US counterpart, this week to discuss how best to tackle the oil price.

"This is Opec's time to shine and especially Saudi Arabia's," says Raad Alkadiri, analyst at PFC Energy, a Washington consulting firm. "It is the moment to remind the US just what a strategic asset [the kingdom] is in terms of the oil market."

But Saudi Arabia's ability to halt rising oil prices has proved limited. Analysts and officials in the main consuming nations question whether the kingdom and its nine Opec brethren have much spare crude to offer the famished market. In January, Opec raised members' output ceiling to 24.5m barrels a day in response to a shortage caused by the general strike in Venezuela, where exports continue to be disrupted. But the supplies Opec subsequently added to the market have done little to stop the climb in prices.

This time Opec may consider temporarily suspending its output limit altogether, but that will do little if the group is about to reach its maximum capacity.

Kuwait could add to the current shortfall in the market by halting as much as 700,000 barrels a day of its production as it shuts down fields to protect them from potential Iraqi sabotage.

Neither Kuwait nor Iraq's oil ministers will be at the meeting, it was revealed yesterday, as both countries prepare for a possible US invasion of Iraq.

A sign of Opec's exasperation with the rise in oil prices - much of which the oil ministers blame on the psychological effect of Washington's war drums - is the fact that the group this week will not bother to wait for the latest report on world oil demand and supply before making its decision, says Adam Sieminski, analyst at Deutsche Bank.

"It is an indication of the likelihood that fundamentals will not play a role in this decision that the ministers are meeting the day before the data release," he said. The most powerful of those statistics is the massive decline in commercial oil inventories - especially in the US.

Stocks have been hit by the cold winter and shortages created by the Venezuelan strike, reaching a level at which the industry's distribution network is at risk of faltering.

To counter that, the world still has strategic stockpiles of oil in leading consuming nations. Japan, the US and Europe have built up their stockpiles to 1.2bn barrels. Analysts say the release of some of that oil as soon as war starts d day will be critical.

But governments are not responsive to the market in timing the release of those stocks. After Iraq invaded Kuwait in 1990, the officials who decide the timing and volume of the release acted two months too late.

Instead of helping to settle the price, when initially went to more than $40 a barrel, the decision eventually pushed oil below $15, because in the meantime Saudi Arabia had increased its production. It is an outcome Opec does not want repeated.

The cartel will do everything in its power on Tuesday to reassure the market that it will not suffer a shortage if the US goes to war while discussing with Mr Abrahams how best to return prices to the preferred $22-$28 a barrel level.