new.stockwatch.com 2003-03-20 14:10 ET - News Release

HOUSTON, March 20 /PRNewswire-FirstCall/ -- Environmental Safeguards, Inc. (BULLETIN BOARD: ELSF) said today that it completed the implementation of its financing arrangement with a private investor group.

The $1,500,000 loan is payable in equal quarterly principal payments plus interest and matures in May, 2008. The loan has an interest rate of 12%. Warrants for the purchase of 1,500,000 shares of the company's common stock at $0.01 were issued in connection with this transaction.

The Company said that the proceeds of the financing would be used for working capital in its expanding environmental cleanup and recycling operations and for other corporate purposes.

In an unrelated matter, Environmental Safeguards noted that it generally responds to bids in the normal course of business, and that it currently has numerous bids for cleanup outstanding, including several bids for equipment to be used in oilfield operations in the Middle East. The Company emphasized, however, that it is currently not operating in the region, nor has it received any response from the US Government or private concerns to whom bids have been submitted.

The Company's patented ITD technology uses a heat jacketed rotating chamber that vaporizes hydro-carbons and hydrocarbon derivatives from contaminated materials, and a condenser that liquefies the vapor into hydrocarbon liquids of better than 99% purity, for reuse. A single ITD unit can process one to 10 short tons of waste per hour, depending on its content. In addition to the United States, soil remediation and hydrocarbon recycling operations have been successfully conducted in Mexico, Colombia, Venezuela, Scotland and the U.A.E. The Company has processed more than 750,000 tons of contaminated waste, recovering in excess of 15 million gallons of hydrocarbon fluids. More information on Environmental Safeguards and its subsidiary, OnSite Technology, can be found at www.onsite2.com .

The Forward Looking Statements or Projections contained herewith involve risks and uncertainties which could cause actual results or outcomes to differ materially from those expressed and, accordingly, should be read in conjunction with the Company's 10-K for the year ended December 31, 2001, with particular reference to Information Regarding and Factors Affecting Forward Looking Statements in the Management Discussion and Analysis of Financial Condition and Results of Operations.

Environmental Safeguards, Inc. CONTACT: James S. Percell, Chairman and President of Environmental Safeguards, Inc., +1-713-641-3838

Web site: www.onsite2.com

www.forbes.com Reuters, 03.20.03, 1:49 PM ET By Ana Isabel Martinez

CARACAS, Venezuela, March 20 (Reuters) - Gleaming in showroom display windows across Venezuela, thousands of new cars are awaiting a buyer. But many will go unsold.

Battered by last year's 9 percent slide in the oil-rich nation's economy, Venezuela's automobile industry is bracing for plummeting sales after a two-month political opposition strike pushed the country even deeper into recession.

Industry representatives are forecasting a 30 percent decline in sales for 2003. A major factor, they say, will be a lack of dollars following the government's introduction of currency controls, which have cut off access to greenbacks for two months and paralyzed the import-reliant economy.

In the last year, car sales had fallen 40.7 percent as the local bolivar currency collapsed 46 percent against the dollar, inflation topped 31 percent, and interest rates climbed.

"Sales could fall this year as much as 30 percent, mostly in the first half. We might see an eventual improvement in the second half, if we manage to export more units assembled here," Roberto Madero, director of Venezuela's automobile business chamber, told Reuters.

Sales fell about 77 percent in the first two months, compared with the same period a year earlier, mainly due to the opposition strike that began in early December. It failed to unseat leftist President Hugo Chavez, but severely disrupted the nation's vital oil industry.

"It has been chaotic. The few people who come here just turn right around when they start talking about prices," said Jose Vicente Fossi, who sells Chryslers in an exclusive showroom in eastern Caracas.

The cheapest vehicle on the market -- with two doors and no air-conditioning -- costs 9 million bolivars ($5,625) in this poverty-ridden country, where the minimum salary is equal to $120 a month.

Fossi smiled as he recalled selling 100 to 120 units a month during 2001 -- a year that saw record sales of 217,000 units -- and the 50 cars a month he sold last year. This year he has been selling only seven cars a month.

In 2002, 128,623 vehicles -- 41 percent of them imported models -- were sold in Venezuela.

"It has been really ugly," said the salesman, who spends long hours surfing the Internet while waiting for customers.

FLIGHT FROM HIGH PRICES

Madero said he hoped interest rates on car purchases would drop from the roughly 50 percent range to stimulate demand. But growing unemployment and weakened consumer purchasing power meant Venezuelans were unlikely to keep buying top model cars and trading them in frequently as they did in the past, he said.

In a nation where petrol is cheaper than mineral water, the two-month opposition strike hit car-loving Venezuelans hard by disrupting gasoline supplies. Drivers were forced to wait for hours in long lines outside filling stations.

Madero underscored the negative impact of the lack of access to dollars for a sector that relies on imports for 60 percent of its products. The bleak market outlook has been compounded by a steep rise in prices as the local bolivar currency lost ground against the dollar.

The bolivar fell 24 percent from the beginning of the year until the government closed currency trading in late January to prepare for its new foreign exchange controls.

The Venezuelan currency stands at 1,600 bolivars to the dollar since the government implemented controls and a fixed exchange rate -- an appreciation of 16 percent from the last day of trading. But on the black market, the greenback is already trading at 2,300 bolivars.

Jorge Garcia Tunon, director of a Chevrolet concession, managed to sell 410 cars in one month in 2001. His tally for this year: no cars in January, 70 in February, 20 in March even with the discounts, preferential interest rates and special offers on the cheapest cars on the market.

"We really worried because we made huge investments to establish this concession, and now those plans are paralyzed," he said.

CRISIS HITS EVERYONE

The used car market also saw sales slip dramatically.

"We have never seen the market in such bad shape," said Carlos Padron, a veteran of 20 years in the business. "Before, you could sell about 12 to 15 cars a month. Now it's more like two or three -- if you are lucky."

Most sales representatives are feeling the pinch because they live on commissions; many have even sold their own cars because they need the cash.

Inmaculada Torres, a Ford saleswoman, bites her lip nervously as she talks about her future and the market on which she is so dependant.

"I rent my home, and we are thinking of moving to a cheaper place. I had to sell my car and buy an older one to cut costs," she said on the verge of tears. "I'm father and mother to my teenage kids."

For others, the crisis means the end of a family business and an introduction into the growing ranks of the unemployed.

Venezuela's jobless rate is 16 percent, according to government figures.

"We're getting squeezed. If this doesn't improve soon, we'll be closing down bit by bit," said Luis Miguel Sanchez, the owner and director of a family business selling Japanese cars. "We've given ourselves until April 30. What can we do?"

www.vheadline.com Posted: Thursday, March 20, 2003 By: Patrick J. O'Donoghue

Venezuelan Ambassador Jorge Rondon left Iraq Monday evening on instructions from the Venezuelan Foreign Ministry and will remain in diplomatic service in Jordan.

Political Sciences professor and anti-government columnis, Anibal Romero claims that the attack on Iraq will affect Venezuela. Firstly, Romero contends, the USA will be seeking out outbreaks of terrorism and divert money from development projects to intelligence gathering and military objectives.

After the war oil prices will probably drop as Iraqi oil flows on to the market … “Venezuela will lose markets as other countries turn to Iraq for supplies … very ironic for Venezuela ... Chavez Frias will not to antagonize the USA since he finds himself in a weak position.”

Romero has harsh words for the French and their attitude towards the war ... “the French imperialists received Zimbabwe’s Mugabe, do business with Chavez Frias and other third world dictators … they are the principle investors in the Iraqi oil industry.”

Oil Drops as U.S. Launches War on Iraq

Thu March 20, 2003 05:05 AM ET By Tom Ashby

LONDON (Reuters) - Oil prices tumbled to three-month lows on Thursday after the United States began bombing Iraq and dealers bet on a swift U.S. victory with little disruption to Middle East supply.

OPEC exporters pledged to fill any supply gap from the conflict in the oil-rich Gulf, while the West's energy watchdog, the International Energy Agency, said it saw no reason to release emergency stocks for the time being.

Hours after U.S. cruise missiles hit targets in Baghdad, officials in neighboring Kuwait said crude output was normal, despite two Iraqi missiles hitting the north of the country.

Supplies from the world's top exporter, Saudi Arabia, were also running smoothly, shippers said.

Benchmark Brent crude oil fell 53 cents to $26.22 per barrel, having touched a three-month low of $25.50.

Brent futures have shed 25 percent of their value in the last six days on a massive bet by investment funds that war will end quickly without major damage to oil installations.

U.S. crude futures fell 75 cents to $29.31.

"The war premium is diminishing on a growing certainty that coalition forces will prevail and allow Iraq to increase production," said Peter Gignoux of Schroder Salomon Smith Barney.

Industry consultant Geoff Pyne said there were still dangers ahead that could drive prices back up.

"Most obviously, there is a danger that Saddam may blow up the Iraqi oilfields," he said.

Iraqi Oil Minister Amer Rasheed denied a Kuwaiti television report that oil wells near the southern city of Basra were on fire.

OPEC TO FILL SHORTFALL

The Organization of Petroleum Exporting Countries said it would tap its spare capacity to make up for any shortage from Iraq. OPEC President Abdullah al-Attiyah of Qatar said he had spoken with cartel members following the U.S. attack.

"As a result of those consultations, I am herewith reiterating OPEC's resolve to make up for any supply shortfall resulting from developing events," he said in a statement carried on OPEC's official news agency.

"To this end, member countries have pledged to use, in the interim, their available excess capacities to ensure continued supply."

A Saudi source said OPEC's leading producer was poised to respond to any oil supply disruptions following the U.S. attack on neighboring Iraq. However, he also said that world markets were currently well supplied.

"The market is well supplied. What everyone fears is Saddam Hussein burning the oilfields," said the Saudi source. "Events are going to be the dictating factor here."

Riyadh has already ramped up production well beyond nine million barrels daily -- versus an OPEC quota of eight million -- in part to cover outages from strike-hit Venezuela.

The International Energy Agency said there was no need for import-dependent Western nations to release emergency stocks as it was confident OPEC could cover the shortfall.

"At the precise hour we speak, I think it is not necessary (to release stocks)," IEA executive director Claude Mandil told Reuters. "We had a very strong statement from OPEC, which has said they will ensure any shortfall and we are confident they will do their best."

Iraqi exports have ground to a virtual halt this week after the United Nations evacuated its staff overseeing Baghdad's oil-for-food program.

The International Energy Agency, which oversees some four billion barrels of oil inventory in 26 industrialized countries, said a release would become necessary only in case of a shortage that could not be covered by OPEC.

msnbc.com MSNBC NEWS SERVICES

March 21 — Several oil wells were on fire in southern Iraq on Friday, but exactly how many was unclear, with U.S. military officials estimating seven fires and Britain saying up to 30 oil wells could be ablaze. Officials noted that in any case, the number is far fewer than the 400 wells in the area, which is near Basra. “PUT INTO context, that’s perhaps not as bad as we might have feared,” British Defense Secretary Geoff Hoon told reporters in London. The oil fields of southern Iraq pump about half of the country’s daily output of 2.5 million barrels. A British military spokesman said the fires were set by Iraq. “Several of the oil heads have been set on fire by (Iraqi President) Saddam Hussein’s forces in an attempt to deflect us from the task,” Capt. Al Lockwood told Reuters. Another British spokesman, Col. Chris Vernon, told Reuters that “U.S. Marines are moving well into the ... oil fields and it seems like we will be able to seize much of the oil structure intact.” The picture in northern Iraq was less clear amid unconfirmed reports U.S. special operations forces had secured the giant oilfields around Kirkuk, the biggest of Iraq’s 15 operational fields. A U.S. official said earlier this month that Iraq had placed explosives at the Kirkuk oilfields to prevent them being captured in the event of a U.S. invasion.

An arrow points to smoke plumes seen in an image taken Thursday by a U.S. satellite. The plumes are consistent with oil fires detected from space before, the National Oceanic and Atmospheric Administration said.

MARKETS HAPPY Oil markets seemed to take comfort from the speed of the U.S.-British advance and shrugged off the latest news of an increased number of Iraqi oil well fires. The lack of an impact from the war on oil shipments from Kuwait also inspired confidence.

     Kuwait<ampersand/>#8217;s state-run radio said Kuwaiti ports were operating normally Friday, and an oil industry source said crude shipments from Kuwaiti oil terminals were continuing without interruption.
   The Pentagon has said it would try to secure Iraq<ampersand/>#8217;s oil fields quickly to prevent Iraqi forces from damaging the country<ampersand/>#8217;s 1,685 wells.

Saddam uses oil as weapon in 1991

1 / 6 Oil as a weapon Jan. 15, 1991 - In the lead up to the Gulf War, military analysts considered how Saddam Hussein might use oil to thwart coalition air strikes, clog desalination plants in the Gulf and disrupt Kuwaiti oil production for years to come. NBC's Fred Francis reports.

2 / 6 A trip into hell March 16, 1991 - In the Kuwaiti desert 500 oil wells burn out of control. Coping with land mines and the spectacular sights, sounds and searing heat of roaring fires, teams of well control experts struggle to control the blazes. NBC's Bill Lagatuta reports.

3 / 6 Gushers and blazes March 26, 1991 - The Wild Well Control team from Texas began trying to cap a gushing oil well, but not enough water and equipment had yet arrived to wrestle the blazing fires. NBC's Deborah Roberts reports.

4 / 6 Still a prisoner of Saddam March 21, 1991 - Burning petroleum containing high levels of sulphur and lead poisoned the air, while a slick larger than the world had ever seen blackened the waters; a health and environmental nightmare. NBC's Deborah Roberts reports.

5 / 6 The health debate June 10, 1991 - If hell had a national park it would be here, but what is the impact on global health. NBC's Robert Hager reports.

6 / 6 380 down, 370 to go Sept. 13, 1991 - Six months after Desert Storm, half of the 750 burning oil wells still burn. NBC's Arthur Kent reports.

1991 FIRES
Even before the current war began, the Pentagon had expressed fears that Saddam Hussein had planned to sabotage Iraq’s oil fields. In 1991, Iraqi troops destroyed more than 700 well heads in Kuwait, turning its oil fields into a desert inferno that took seven months to extinguish. When Iraqi troops retreated from Kuwait in February 1991, they attached plastic explosives to well heads and piled sandbags against them to direct the force of the explosions for maximum effect. The result was geysers of burning crude at 603 wells, serious damage at more than 100 others and widespread environmental degradation. Teams of firefighters from the United States, Canada and eight other countries worked from April until November to put out the fires.
Most of the teams used seawater pumped through Kuwait’s empty oil pipelines to battle the fires. The heat was so intense, at more than 2,000 degrees Fahrenheit, that water sometimes continued boiling on the ground for two days afterward, said Mark Badick of Safety Boss, Inc. “We’ve had fire helmets melt on our heads,” said Badick, whose Calgary-based firm put out 180 of the Kuwaiti well fires.
Firefighters from Hungary had a different technique, using two jet engines mounted horizontally on a tank chassis — a homemade vehicle they called “Big Wind” — to blast flame-retardant foam at the fires. It took Kuwait more than two years and $50 billion to restore its oil output to prewar levels. If Iraq sabotaged its oil fields, any cleanup could take far longer and cost much more.

12 YEARS OF SANCTIONS Iraq’s fields and pipelines are badly run down after 12 years of U.N. economic sanctions. Its fields are also much farther from the sea than those in Kuwait, meaning a ready source of water might not be so easily available. Destruction could be especially bad if Iraqis set off explosives underground, deep within the well shafts themselves. If that happened, firefighters would have to drill a new “relief well” and pump a mixture of sand, gel and mud into each damaged shaft to try to plug it up and stop the blowout. “It’s a long, arduous process,” Badick said. Whereas he and his crews put out as many as five fires a day in Kuwait, cleaning up after a single underground explosion can take two months.