Reuters 03.28.03, 3:30 PM ET

CARACAS, Venezuela, March 28 (Reuters) - Venezuela's CANTV <TDVd.CR>, the nation's largest telecommunications company, is seeking government approval for new tariffs that will increase telephone charges by about 19 percent this year, the company's president said on Friday. CANTV, whose principal shareholder is U.S. No. 1 local telephone company Verizon Communications Inc. (nyse: VZ - news - people), has not defined the new tariffs, as Venezuelan residential charges are still frozen by presidential decree as part of price controls intended to curb inflation. "We are hoping for approval of the new tariffs, which have been worked out with Conatel (state telecommunications commission), CANTV President Gustavo Roosen told Reuters during a company shareholder meeting. Roosen said the charges would be increased on average about 19 percent for the year. CANTV, the domestic market leader in telecoms and Internet access, last year raised its charges by an average of 25 percent. During their assembly, CANTV shareholders approved an ordinary dividend of 71 bolivars per share, or 497 bolivars per American Depositary Share, to be paid on April 23. Shareholders also authorized the board to issue up to 150 billion bolivars (about $94 million at the current exchange rate of 1,600 bolivars to the dollar) in commercial paper coming due June, 30, 2004. Last year, the company, the largest presence on the Venezuelan stock market, reported a 27.7 percent fall in net profits to 61.03 billion bolivars as its results were undercut by inflation and currency adjustments. CANTV fourth-quarter results were also battered by a strike started in December by opposition leaders trying to oust President Hugo Chavez. CANTV reported a quarterly loss of $2 million compared with profits of $22 million in the same period in 2001. Roosen refused to give detailed first-quarter forecasts but he said he believed the results would be better than the company had been expecting. He said the company was now focused on significantly reducing costs and maintaining cash flow.

<a href=www.vheadline.com>Venezuela's Electronic News Posted: Friday, March 28, 2003 By: Patrick J. O'Donoghue

The legal war between six former Petroleos de Venezuela (PDVSA) executives and the Venezuelan government is heating up with a government offensive. 

The Supreme Tribunal of Justice (TSJ) Constitutional Chamber is said to be working on a sentence project that would allow an injunction against an appeal court decision last week to lift arrest warrants against former PDVSA executives & managers grouped in the Gente de Petroleo group, accused of leading the crippling oil industry stoppage against the government. 

The appeal court judge that revoked the arrest order ruled that the state prosecutor had failed to provide sustainable charges for the arrests.  TSJ magistrate, Jesus Eduardo Cabrera will draw up a position paper to be discussed and voted upon by the TSJ Plenary Chamber sometime next week. 

It has been learned that the Constitutional Chamber will also issue a ruling on the case of Federation of Chambers of Industry & Commerce (Fedecamaras) president, Carlos Fernandez, who had been placed  under house arrest ... the 7th Appeals Court chamber granted Fernandez his liberty on March 20.

Magistrate Jose Delgado Ocando is working on a project to admit an injunction introduced by state prosecutor, Luisa Ortega and to order a public hearing. 

<a href=www.vheadline.com>Venezuela's Electronic News Posted: Friday, March 28, 2003 By: Patrick J. O'Donoghue

In the continuing battle of words between the Bush administration and Venezuelan President Hugo Chavez Frias, State Department Richard Boucher has dismissed allegations that the Anglo-American war on Iraq has led to a loss of US leadership in Latin America. 

President Chavez Frias says the scant support in Latin America shows that the US is losing out south of the border. 

Referring to Chavez Frias' latest challenge, Boucher says, "It's neither a logical argument nor has it an base in reality ... the fact that some countries in the western hemisphere have stood up and asked to be counted in this matter is important for us."

Calling seven Latin American countries "volunteer members of the Coalition," Boucher says the Central American countries of Honduras, El Salvador, Costa Rica, Panama and Nicaragua support the Anglo-American war on Iraq, along with Colombian and the Caribbean country of the Dominican Republic. 

Boucher did not comment President Chavez Frias' allusion to Brazilian President Lula da Silva's anti-war statements and Chile's initial position on the UN Security Council.

EDUARDO KAPLAN, Dow Jones Newswires Friday, March 28, 2003 (03-28) 11:49 PST (AP)

<a href=www.sfgate.com>A Dow Jones News Analysis

NEW YORK (Dow Jones/AP) -- For all the talk about orderly debt restructuring, every day seems to bring news of a new Latin American government or company rushing to exchange its bonds.

The latest to join the growing line was the market-unfriendly government of Venezuela President Hugo Chavez, who announced Wednesday his cash strapped country will seek to exchange part of its foreign debt.

The news came just as Uruguayan officials were flying back home after an international roadshow to discuss a debt exchange that could reach $5 billion.

Meanwhile, several local and foreign companies that went on a shopping spree throughout the region in the 1990s are now dealing with devalued assets, depreciating currencies and lowered growth expectations.

A unit of Spain's Endesa in Chile, Brazil's local divisions of U.S.-based AES Corp., and Mexico's TV Azteca are some of the names talking to creditors about their debt burdens.

Still hovering over the horizon is the massive restructuring that Argentina will have to eventually face following its sovereign debt default in late 2001, which surpassed the $100 billion mark and triggered the country's unprecedented economic collapse.

It's hard to pin down a total figure, but Jose Barrionuevo, director of emerging market strategy at Barclay's in New York, has seen enough to call Latin America the most leveraged region in the emerging market sector.

"I can't remember a time like this," said Barrionuevo. "It's a reflection of a weak global environment which suggests things may not be improving soon, but it's worse for many of these economies since they have been in recession or close to one for three or more years. We won't have a new credit cycle until the U.S. starts growing."

Global investors who have been dealing with a fair share of bursting credit bubbles in the past three years may temporarily overcome their debt restructuring fatigue and listen to some of the latest overtures by sovereign issuers.

After all, as a recent Lehman Brothers report pointed out, debt restructuring under the threat of default is still preferable to outright default.

Uruguayan officials attested to this sentiment last week after a round of meetings with U.S. investors. The country's central bank president, Julio de Brun, said reactions were better than expected. Venezuela will likely meet willing parties, judging by the early responses.

"This is a rush, but it's more orderly than the credit restructuring in the 1990s," said Christian Stracke, head of emerging market research at independent research firm CreditSights.

Stracke was referring to the sovereign debt crises in the latter part of the decade following debt defaults by Russia, Ukraine and Ecuador.

"I think that Uruguay and Venezuela are showing that they have learned some lessons from what happened to Ecuador and Russia, for instance. They are trying to approach creditors first, instead of defaulting. They are addressing a problem of temporary liquidity, not of solvency," Stracke said.

This palpable sense of progress is a welcome development, but being able to talk to investors will amount to nothing more than good intentions if no deals are struck.

Barclay's Barrionuevo questions the prospects of the latest debt exchange offers if Uruguay and Venezuela can't come up with decent incentives for bondholders. He also said he expects Ecuador to join the ranks and start talks with creditors in the second half of the year.

Bad as conditions sound for sovereign issuers, they are even tougher for companies trying to restructure debt.

"I think in many cases you have a solvency problem," Stracke said. "Many of these companies are operating in environments where there are no sources of financing and economies aren't posting growth."

<a href=ogj.pennnet.com>Oil & gas Journal Sam Fletcher Senior Writer

HOUSTON, Mar. 28 -- Near-month oil futures prices rebounded above $30/bbl Thursday, rising for the third time this week on the New York Mercantile Exchange as traders reversed their previous prewar sell-down based on earlier expectations of a quick and easy victory in Iraq.

The May contract for benchmark US light, sweet crudes jumped by $1.74 to $30.37/bbl Thursday on NYMEX. That same contract lost a total of $12/bbl in seven trading sessions during Mar. 13-21, with most of that loss occurring before the first bomb fell on Baghdad late last week.

Despite rapid advances by US-led forces in Iraq, futures traders have become more pessimistic during the first week of fighting, especially as they reconsidered the record-low levels of US inventories of oil and petroleum products in light of recent disruptions of 800,000 b/d of crude production as a result of escalating political violence in Nigeria.

Traders previously were confident that the other 10 active members of the Organization of Petroleum Exporting Countries would make up the loss of some 2 million b/d of Iraqi production during the war. But Venezuela still hasn't recovered its previous production level of more than 3 million b/d following a general strike aimed at ousting President Hugo Chávez. Now some industry analysts are wondering whether Nigeria may turn into "another Venezuela."

Moreover, four OPEC members—Algeria, Indonesia, Saudi Arabia, and Venezuela—called for an immediate halt to hostilities in Iraq during the recent 2-day debate by the United Nations Security Council. Algeria's UN representative said the US, UK, and other participants in the invasion of Iraq are in violation of Security Council "norms." Algeria endorsed the resolution recently adopted by the League of Arab States calling for unconditional withdrawal of foreign forces from Iraq.

Energy prices The June contract for benchmark US crudes gained $1.62 to $28.45/bbl Thursday on NYMEX. Heating oil for April delivery shot up 6.74¢ to 81.15¢/gal. Unleaded gasoline for the same month jumped by 5.05¢ to 97.47¢/gal.

The April natural gas contract advanced by 4.9¢ to $5.15/Mcf, "lifted by firm crude oil prices and short-covering ahead of expiration" of that contract, said analysts Friday at Enerfax Daily. "Look for the new May front month to benefit from a short covering rally today if it manages to stay above a key trend line at $5.25(/Mcf). That could ignite fund buying again," they advised.

The US Energy Information Administration reported Thursday that 7 bcf of gas was injected into US underground storage last week, marking "the first time an injection has been seen during that corresponding week," said Enerfax Daily analysts. That compares with withdrawals of 85 bcf the previous week and 75 bcf during the same period last year.

"The slight build in storage gas was seen as negative by traders, but with storage levels still around record lows, it didn't make much difference," the analysts said. US gas storage now stands at 643 bcf, down 918 bcf from a year ago and 580 bcf below the 5-year average.

Meanwhile, aggregate projections for the 40 largest publicly traded producers indicate US gas production in the first quarter of this year will be down 2.2% from a year ago, although up 1.1% sequentially, said Robert S. Morris, Banc of Securities LLC, New York, in a Thursday report.

In London, futures prices for North Sea Brent oil rallied Thursday on the International Petroleum Exchange with reports that the war in Iraq is likely to become more difficult. A US announcement that as many as 100,000 additional troops may be deployed was interpreted as evidence that the allies may have miscalculated the difficulty of the war, analysts said.

The May Brent contract gained $1.53 to $26.82/bbl Thursday. However, the April natural gas contract dipped by 1.9¢ to the equivalent of $2.70/Mcf on IPE.

The average price for OPEC's basket of seven benchmark crudes gained $1.12 to $26.66/bbl Thursday.

Contact Sam Fletcher at samf@ogjonline.com