www.signonsandiego.com By Bruce Stanley 11:40 a.m., March 11, 2003 Associated Press

The members pledged to boost output in the future to keep supplies flowing in case of any serious disruption.

VIENNA, Austria – OPEC members agreed Tuesday to stick with their current quotas for crude oil production but pledged to boost output in the future to keep supplies flowing in case of any serious disruption.

Representatives of the Organization of Petroleum Exporting Countries ruled out formally raising output now as a way of reassuring nervous markets before any U.S.-led attack on Iraq.

However, they took extreme care not to mention such a conflict as a likely source of disruption, apparently afraid of seeming to support such a war by preparing to respond to its possible impact on markets.

Despite sharply higher oil prices, OPEC members argued that the world has enough crude to meet demand and blamed Middle East tensions for causing fears of a possible shortage.

"We are studying the market and keeping abreast of it," Saudi Arabian Oil Minister Ali Naimi told reporters. "There is no shortage of supply, the market is in balance, there is plenty of oil and there is a commitment to do our best within our capabilities, which we think are enough to satisfy any possible 3/8shortage in the market for whatever reason."

OPEC's president, Abdullah bin Hamad Al-Attiyah, confirmed that it was not changing its output target of 24.5 million barrels a day. Delegates planned to meet on June 11 in Doha, Qatar, to review market conditions.

OPEC officials announced their decision after meeting for two and a half hours at the group's headquarters in Vienna, Austria. OPEC pumps about a third of the world's crude.

Markets worry that a conflict with Iraq would halt that country's 2 million barrels in daily exports. The impact on supplies and prices of crude could be more severe if fighting spread beyond Iraq's borders.

"The international political tensions have, without any doubt, reduced OPEC's influence on prices," bin Hamad Al-Attiyah said in a speech to delegates at the start of their meeting.

He said OPEC must make a plan to cope with "any radical change in market conditions which may result from developments in the Middle East." This was as close as OPEC's official proclamations went to mentioning a war against Iraq, one of its founding members.

Comments by Obaid bin Saif Al-Nasseri of the United Arab Emirates on Monday suggested that the United States and other major oil-importing countries might need to rely on their own strategic petroleum reserves. The U.S. alone has a strategic petroleum reserve, or SPR, of 600 million barrels.

"OPEC is working flat out to make sure the market is supplied," said Raad Alkadiri, an analyst at The Petroleum Finance Co., a Washington consultancy.

Alkadiri agreed that the group would be hard-pressed to cover a dual shortfall from Iraq and Kuwait.

"If there are any signs of supply disruptions beyond Iraq's borders, then I think we'll see use of the SPR fairly quickly," he said.

Energy Secretary Spencer Abraham, in Vienna for an International Atomic Energy Agency meeting, appeared to confirm that view.

Asked at a news conference whether the U.S. government would release oil from its strategic reserves, Abraham told reporters: "We are prepared to act very quickly, but only if we believe a severe disruption of supply exists."

The United States and other major importing countries want OPEC to maximize its production if a war threatens supplies. Abraham planned to meet Tuesday evening with Saudi Arabia's Oil Minister Ali Naimi.

April contracts of U.S. light, sweet crude were trading at $36.80 a barrel in New York, down 47 cents from Monday's close. Brent crude futures for April delivery were 58 cents lower at $33.11 in London.

newstribune.com Tuesday, March 11, 2003

VIENNA, Austria (AP) -- Despite sharply higher oil prices, OPEC members argued that the world has enough crude to meet demand and blamed the threat of a U.S.-led war against Iraq for fears of a supply disruption.

Even so, representatives of the Organization of Petroleum Exporting Countries tried Monday to reassure nervous markets that its members can provide more oil if a conflict halts Iraq's 2 million barrels in daily exports.

"We want to keep the market reasonably supplied," said Rilwanu Lukman, Nigeria's presidential adviser on petroleum and energy, who added that he believes the market has enough oil for now.

OPEC delegates were to meet Tuesday at the group's Vienna headquarters to review output. Members of the cartel pump about a third of the world's crude, and its members are already exceeding their target to cash in on a 12-year high in prices.

Saudi Arabian Oil Minister Ali Naimi, speaking on arrival at a Vienna hotel, said the market is adequately supplied with crude.

"OPEC will do the most it can to avoid any shock in the market," OPEC President Abdullah bin Hamad Al-Attiyah told reporters at a different hotel. "We will do whatever we can, but this is in accordance to our capacity. When we reach a level that we cannot exceed, then we cannot do anything."

In the event of war, Al-Attiyah said OPEC would ratchet up production and possibly even suspend its output quotas, to a maximum of 3-4 million more barrels of oil a day.

OPEC's Secretary General and oil ministers from Iran, Algeria and Venezuela played down the possibility that the group might suspend its output ceiling of 24.5 million barrels a day. Al-Attiyah expressed a greater degree of flexibility, without endorsing a suspension.

Yet some analysts worry that OPEC is pumping near its limits and say there is little the cartel can do to cool prices if war breaks out.

A conflict is almost sure to disrupt Iraq's exports, but at least one OPEC member -- the United Arab Emirates -- said it would be difficult for the group to cover a larger shortfall if fighting spreads beyond Iraq's borders.

Kuwait, where thousands of U.S. troops are poised to attack Iraq, has said a war would prompt it to shut down its northern oil fields to prevent an Iraqi counterstrike. That would reduce Kuwait's output by around 700,000 barrels a day, or about a third of its production.

Al-Nasseri's comments suggested that the United States and other major oil-importing countries might need to rely on their own strategic petroleum reserves -- totaling 4 billion barrels.

The United States and other major importing countries want OPEC to maximize its production if a war threatens supplies.

U.S. Energy Secretary Spencer Abraham, due in Vienna on Tuesday to attend an International Atomic Energy Agency meeting, said he might meet with OPEC leaders.

Despite Al-Attiyah's claim that OPEC has 3-4 million barrels in daily spare capacity, it was not clear how much higher the cartel could go in satisfying U.S. demands. Aside from Saudi Arabia and perhaps Nigeria, most OPEC members are believed to be producing at their limits.

April contracts of U.S. crude ended trading Monday at $37.24 a barrel in New York, down 3 cents from Friday's close. Brent crude futures for April delivery closed 41 cents lower at $33.69 in London.

reuters.com reuters.com Tue March 11, 2003 03:41 PM ET By Pascal Fletcher

CARACAS, Venezuela (Reuters) - Venezuela's army, rejecting Colombian charges that it is letting leftist rebels operate from Venezuelan territory, said on Tuesday it would drive out any guerrillas or paramilitaries that crossed the border.

Venezuelan army commander Gen. Jorge Garcia Carneiro also called for talks with his Colombian counterpart to discuss security along the rugged, 1,400-mile frontier that separates the two Andean neighbors.

"Neither the army, nor the armed forces in general, are going to let anyone use Venezuela as a hideout, and much less irregular forces," Garcia, who was made army chief in January by President Hugo Chavez, said at a news conference.

Relations between Bogota and Caracas have been strained again this month by insistent charges by Colombian officials and media that Chavez's government is allowing Colombian Marxist rebels to set up camps in Venezuela.

The left-leaning Chavez is frequently accused by his domestic and foreign foes of collaborating with Colombian guerrillas, but he has repeatedly denied these accusations. He warned the guerrillas Sunday not to meddle in Venezuela.

While vowing to protect the long frontier, Garcia said its length and terrain -- a patchwork of jungle, savannah and mountain -- made it impossible to patrol every inch.

"Even if you had 300,000 troops holding hands you're never going to be able to control the frontier, because it is a very extensive zone," he said.

Colombian politicians and media have alleged that Manuel "Sureshot" Marulanda, the top commander of Colombia's biggest rebel group, the Revolutionary Armed Forces of Colombia, known as FARC, has been hiding out in Venezuela.

Garcia said the Venezuelan army would try to keep him out.

"The day that Marulanda, or any other irregular crosses the frontier line, then he is going to get a tough response from our army," he said. Garcia added that unlawful incursions by the Colombian armed forces would also not be tolerated.

Garcia has been fiercely criticized by opponents of the populist president who accuse the general of using his troops to back the Venezuelan leader's self-styled "revolution."

Chavez, who survived a coup by rebel military officers last year, used soldiers to break an opposition strike in December and January that crippled oil output in the world's No. 5 oil exporter. Oil production has been steadily recovering since the strike petered out in early February.

Garcia is currently managing a national food distribution program aimed at offsetting shortages caused by the strike.

He has also been a key figure in a campaign started by Chavez to involve the armed forces in development work, such as building houses, providing medical services and growing food.

Critics of the president say he is turning the armed forces into his personal Praetorian guard and is also dragging the country toward Cuban-style communism.

www.vheadline.com Posted: Tuesday, March 11, 2003 By: Patrick J. O'Donoghue

The Venezuelan opposition has proposed to the Group of Friends meeting in Brazil to make Organization of American States (OAS) general secretary Cesar Gaviria a mediator in the continuing Venezuela political crisis.

Political observers suggest that the proposal would seem to indicate that the opposition is tiring and unable to come up with anything substantial and innovative, and now want to see the 6-nation Group of Friends exert more pressure on the government.

Opposition negotiator Timoteo Zambrano argues that changing Gaviria's status from facilitator to mediator will have a knock-on effect ... "we would like to see a mega-meeting with the presence of Jimmy Carter, Gaviria, a UN general secretary representative and foreign ministers from the six nations ... we are seeking a definite solution to the conflict."

Zambrano accuses the Chavez Frias government of increasing levels of violence persecuting its political enemies and attempting to change the Supreme Tribunal of Justice (TSJ) constitution.

Placing the onus on the government, Zambrano says that, after four months of negotiations, it is time for the government to fulfill its obligation to solve the political crisis. Political observers say Zambrano is angling to position UN adviser Diego Arria ... a former protege of Carlos Andres Perez ... as a key player in the new negotiating ball game.

Speaking at the Group of Friends meeting, Brazil's interim Foreign Minister Samuel Pinheiro Guimaraes has defended the thesis of maintain Gaviria as facilitator, while President Hugo Chavez Frias continues to lobby for the inclusion of France and Russia in the Group of Friends ... something the Brazilians have refused to agree to.

www.vheadline.com Posted: Tuesday, March 11, 2003 By: Patrick J. O'Donoghue

Small to medium industrialists (Pymi) say they welcome the government's new policies to strengthen the hard-hit sector.

Nueva Esparta Chamber of Small to Medium Businessmen & Artisans (Capmine) president Adelino Marquez praises the chance for small businessmen to pay their social security obligations by installments ... "paying 10% of the debt we can get the solvency card and pay the rest in a maximum of 36 months."

Marquez says the Pymi Federation has signed three such agreements with the government and believes that it will help create jobs and get production in the sector on an equal par again.