www.vheadline.com Posted: Monday, March 10, 2003 By: Patrick J. O'Donoghue

The Women’s Bank (Banmujer) has handed out 29 million bolivares of credits to 58 families in Nueva Esparta in an event which coincided with International Woman’s Day.

Proud Banmujer regional representative, Luisana Rodriguez highlighted the role of hardy island women in the different social programs sponsored by the non-status bank.

“Our bank has one of the highest repayment margins in Venezuela and our credits are effective … the associative economic units we support have developed productive groups and helped women become breadwinners for their families.”

www.vheadline.com Posted: Monday, March 10, 2003 By: Patrick J. O'Donoghue

Bolivarian Workers Force (FBT) leader Jose Khan has led a commission to the International Labor Organization (ILO) HQ in Geneva to defend the government’s policy of dismissing thousands of rebel Petroleos de Venezuela (PDVSA) workers during and after the failed national stoppage.

National Assembly (AN) deputy Khan says he will present “proof of the consequences the national stoppage had on workers and the economy.”

The government-sponsored trip comes as PDVSA executives and managers backed by the Confederation of Trade Unions (CTV) take their case to the ILO. Khan says the delegation will show that there is no political persecution in Venezuela … “the CTV and Federation of Chambers of Industry & Commerce (Fedecamaras) and 'Gente de Petroleo' called the stoppage committing a series of crimes and violating people’s right to education and the basic foodstuffs … gas had to rationed and domestic gas was scarce commodity … they also called on people not to pay taxes.”

news.ft.com By Andy Webb-Vidal in Caracas Published: March 10 2003 18:56 | Last Updated: March 10 2003 18:56

Venezuela’s economy will shrink by more than 40 per cent in the first quarter because of the unprecedented collapse in oil production and the resulting dearth of foreign currency, according to forecasts by a top Spanish-owned bank.

Banco Provincial, the local subsidiary of Spanish bank BBVA, predicted the economy of Venezuela, the world’s fifth-largest oil exporter, will shrink by 42 per cent in the first three months of the year, making it the sharpest contraction on record. 

Oil sector activity would drop by 69 per cent, the bank said, while the non-oil sector would contract by 33 per cent. The bank also said the unemployment rate would increase to 25 per cent. The official jobless rate is currently at about 18 per cent.

The grim figures are in line with a similar forecast in January by Spain’s BSCH bank, which predicted a contraction of 40 per cent n the first quarter and 9-30 per cent for the full year, depending on how quickly oil output recovers.

Venezuela produced 3.1m barrels per day in November, before output dropped to as low as 150,000 b/d because of  a strike led by employees at Petroleos de Venezuela, the state oil company, against the government of President Hugo Chavez.

Oil output has since been recovering, despite the government’s dismissal of nearly 16,000 PDVSA employees, including many skilled oil-field and refinery technicians.

Most of PDVSA’s oil traders have also been fired, leaving the company with hundreds of millions of dollars in uncollected receivables from third parties.

Mr Chavez said last week PDVSA had lifted its notice of force majeure, a clause companies can invoke when circumstances beyond its control render it unable to meet obligations to customers. 

Government officials say oil output is currently "near normal" levels, at around 2.6m b/d, but former PDVSA managers claim production is below 2m b/d. 

Venezuela’s economic woes have been compounded by the government’s decision to implement foreign exchange controls.

Regular sales of dollars from the central bank, which receives PDVSA’s foreign currency earnings, were suspended at the end of January due to the rapid decline in international reserves as a result of the strike.

The government has since created an institution to administer dollar sales to businesses requiring hard currency for essential imports, but the agency has yet to begin operations, strangling companies already reeling from the effects of the strike.

www.forbes.com Reuters, 03.10.03, 2:04 PM ET   WASHINGTON, March 10 (Reuters) - ConocoPhillips (nyse: COP - news - people) and CITGO Petroleum Corp. told federal energy markets regulator they longer opposed Dynegy Inc's (nyse: COP - news - people) plan to build a liquefied natural gas terminal in Louisiana after the company agreed to take steps to limit shipping traffic congestion near the facility. ConocoPhillips and CITGO had protested the Federal Energy Regulatory Commission's decision last December to give preliminary approval to Dynegy's proposal to build the first LNG terminal in the United States in almost 25 years. CITGO is owned by Venezuela's state oil company. The companies were worried that the LNG plant, which would be located in Hackberry, Louisiana, would impact shipping traffic on the Calcasieu ship channel. The companies told FERC last Friday that they were withdrawing their protest, because Dynegy agreed to have a dedicated tug service to handle tankers delivering LNG, improve navigation aids in the channel and adopt procedures for LNG deliveries at night. The steps to ease shipping traffic are similar to what CMSEnergy (nyse: CMS - news - people) has adopted for expanding its LNG facility. Dynegy's terminal would receive and process 1.5 billion cubic feet of natural gas per day from tankers, then transport the vaporized LNG to the natural gas pipeline grid. FERC must still review the environmental impact of Dynegy's terminal before deciding whether to give final approval. Dynegy hopes to have the terminal operating by the end of 2006. ConocoPhillips and CITGO said they hoped that by withdrawing their protest FERC would speed up its review of Dynegy's plant. U.S. demand for natural gas is forecast to soar to 30 trillion cubic feet by 2015, up from 22.8 Tcf in 2000, according to the Energy Information Administration. LNG, a super-cooled and compressed form of natural gas, is used to fuel electricity generating plants. It would take 600 ships carrying natural gas in its conventional form to equal the cargo contained on just one LNG tanker, which makes it practical and economical to import natural gas from overseas. LNG, which begins as natural gas in a vapor form, is kept at ultra-cold temperatures and compressed for transport aboard special tankers. The manufacturing process cools the gas to minus-259 degrees Fahrenheit, changing the gas into liquid and shrinking it to less than 1/600 of its original volume.

sg.biz.yahoo.com Tuesday March 11, 2:26 AM (This updates an article from 1519 GMT with additional comments on stockpiles, prices and economic outlook.)

By David Bird

Select from the most reliable agencies Of DOW JONES NEWSWIRES

VIENNA (Dow Jones)--OPEC doesn't need to act now to cover potential lost supplies caused by an Iraq war, because strong output and expected lower demand will balance the market, Algeria's oil minister said Monday.

In an interview with Dow Jones Newswires, Chakib Khelil said he believes the Organization of Petroleum Exporting Countries can easily cover a supply loss of 3 million barrels a day, exceeding current Iraqi output of 2.4 million b/d.

For this reason, he said OPEC doesn't have to take action at Tuesday's output policy meeting but rather should plan to meet if and when more oil is needed after conflict in Iraq has begun.

Khelil said oil prices will rise on the start of war, though he believes there is a possibility of a collapse to below $22/bbl thereafter.

Concerns "might last a week or two weeks, but the prices will go down even without ... the use of (strategic) stockpiles." Khelil believes the U.S. would want to restore Iraq's oil output as quickly as possible and that Iraqi supplies could be cut off for as little as two weeks.

"We're going to know very fast whether we're going to have a long disruption or not," Khelil said.

"We've seen in the past that once it starts going below $22/bbl, it's very difficult to keep it (from dropping further)," he said, adding that when prices fell to $16-$17 in 2001, output discipline improved.

"If you're looking at the next three to six months, I think the concern is there," that OPEC could be putting too much oil on the market and prices could crash, he said.

A war would severely disrupt the world economy and therefore pull down potential growth in oil demand, exacerbating the competition between OPEC and non-OPEC exporters for market share, he said.

Khelil said current oil prices, trading just below their peaks from the 1990-1991 Gulf War, are inflated solely by fears related to war.

"Stocks are reasonably OK, supply is there," he said. "From that point ... there's no reason why prices are at this level. Once that uncertainty is eliminated, I think we should see a normal situation return and maybe prices at more reasonable levels."

Khelil said in the interview: "OPEC is here to make sure we're meeting the demand." After two increases in output quotas totaling 2.8 million b/d since January, there isn't any need for another increase now, even if war breaks out.

If further supply was needed from the group, it could meet after a war and decide to raise output, he said.

Has Hunch IEA Won't Unplug Its Oil Reserves

Khelil said because he believes OPEC can easily meet demand now, he doesn't think the International Energy Agency, the energy watchdog for members of the Organization of Economic Cooperation and Development, will at the start of a war unleash some of its strategic oil stockpiles.

"I don't think there is a need for them to use the supply" he said, adding it could be brought to market later if OPEC couldn't manage the market or if high prices were crippling economies. Emergency stockpiles are a "last resort" to guard against shortages, he said.

"After they've seen that OPEC has used all it can, maybe they'll come in. My hunch is they are not going to use it," he said.

"Stocks are OK. Venezuela is coming back up ... and we have already seen other countries taking the place of Venezuela," during the export cuts caused by an oil workers' strike there.

Khelil said he sees a second-quarter decline in demand of 2 million b/d.

"In terms of the fundamentals, I cannot explain why OPEC should do anything at this stage," Khelil said. "All the indicators show that we don't really need to give more oil."

"As you know, OPEC members are fast in increasing production, maybe slower in pulling out (cutting back) production," meaning a price collapse is possible, he said. "My feeling is ... that whatever happens, uncertainty isn't going to be relieved (quickly). My hunch is there's going to be a lot of tension."

• By David Bird, Dow Jones Newswires, david.bird@dowjones.com