Asis Times On line By Humberto Marquez

CARACAS - United States-based oil companies will get the lion's share of the petroleum business in Iraq once the war there is over, undermining the interests of OPEC (Organization of Petroleum Exporting Countries), say oil industry experts, who also warn that an end to the war will not immediately translate into abundant supplies of inexpensive crude. "There is no doubt that the military occupation of such an important oil exporting country, with a nationalist government, is creating cracks in OPEC and affecting the mid- and long-term interests of its other members, like Venezuela," says Víctor Poleo, a professor of graduate studies in oil economics at the Central University (UCV), in Caracas. After the war "there will be a substantial increase in Iraqi oil production, and I wouldn't be surprised if schemes emerged to weaken, if not destroy, OPEC", said Humberto Calderon, a former Venezuelan minister of energy and of foreign relations, in a conversation with Inter Press Service. The US has been trying for some time to reduce its dependence on oil supplies from the Persian Gulf region, home to the dominant members of OPEC, an 11-country cartel comprising Algeria, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela. That was the aim of the controversial energy plan that George W Bush brought with him to the US government, in which he has sought to expand oil exploration and exploitation within his country's own territory, even in the protected natural areas of Alaska. But control of Iraqi oil wealth could turn into alleviation for US oil worries and a key to reducing prices - and to wielding influence over OPEC. However, not all experts believe that after the war it will be easy for petroleum investments in Iraq to flourish. "It would be a mistake to assume that immediately after the US occupation there would come a prolonged period of political stability in Iraq and surrounding areas," warns another graduate professor at UCV, Mahzar al-Shereidah, an Iraqi-Venezuelan. The "stability factor", al-Shereidah told IPS, "is fundamental for the materialization of oil industry projects". "The big oil companies are very aware of the rich subsoil in Iraq, but an occupying regime creates additional risks to dealing with political, ideological, cultural and religious factors. And the corporations are going to take that into account," he added. Iraqi territory holds 112 billion barrels of petroleum in proven reserves, the second largest volume within OPEC, after Saudi Arabia's 260 billion barrels. And Iraq's crude is relatively easy to extract from the ground. Each oil well represents major output because production costs are just US$2 per 159-liter barrel. Because it is light, sweet crude it is easily refined and has little sulfur or metal residue. But "the extreme cruelty of this invasion, which has affected entire peoples, awakens deep sensitivities in a nation that is proud of resisting the conquerors. We are going to witness the allotment of war booty and the United States will take the lion's share - but it will not be effortless," al-Shereidah commented. According to former oil minister Calderon, Iraq could double its output of 2.4 million barrels daily within a short time. Prior to the war, total production was limited through the "oil for food" program, overseen by the United Nations in the context of the embargo imposed against Baghdad for invading neighboring Kuwait in 1990. As Iraq's role as a supplier increases, "the OPEC countries will be elbowing each other out of the way" to win markets, pushing prices down, Calderon predicts. Fadhil Chalabi, an Iraqi national and former OPEC secretary general, goes even further. He believes his country could even double its proven reserves through intense oil exploration, becoming a "super-giant producer", like Saudi Arabia, putting as much as 10 million barrels on the international market each day. In addition to its oil output potential, Iraq has geographic advantages that reduce the cost of reaching global markets. Its petroleum can be shipped via its port on the Persian Gulf and, to bypass the vulnerability of the Straits of Hormuz between the Gulf and the Arabian Sea, through the pipelines connecting Iraqi oil fields to the Mediterranean and Red seas. Iraq as a super-giant producer of crude oil managed by US-based companies would crown the dearest dream of the leaders of the governing Republican Party: "to bring OPEC to its knees," forcing the cartel - through competition from Iraq - to sell its oil at lower prices, says Chalabi. In the opinion of the former OPEC official, the depression of prices and the abundance of oil in Iraq will prompt investors to shift their focus away from higher-cost areas, like the North Sea, where Britain and Norway extract oil. They will turn to areas with lower production costs, precisely those of OPEC and the Persian Gulf region, he says. UCV professor Poleo believes the "US empire will want to hold the keys to all major oil sources, and that will ultimately include the Andean-Amazon oil reserves, which extend from Trinidad-Tobago, through Venezuela, Colombia, Ecuador, Peru and Bolivia." Venezuela is the fifth leading OPEC member in terms of conventional crude reserves, at 77 billion barrels, but it also holds 270 billion barrels of unconventional, extra-heavy and bituminous crudes. The 11 OPEC countries have managed their output during the past two decades to maintain stability in the average price of the cartel's "basket" of seven crudes. They consider the optimal price range for consumer and producer nations alike to be $22 to $28 a barrel. OPEC "rejects the notion of using petroleum as a political weapon", stressed a former secretary general of the organization, Ali Rodriguez, current president of Venezuela's state-run oil firm PDVSA. As such, OPEC has made an effort prior to and during the war in Iraq to ensure a consistent supply of oil to its clients in the industrialized world. The markets have seen petroleum prices decline from a mean of $32 per barrel before the war to fluctuating around $26 a barrel two weeks after the invasion of Iraq began. The situation kept in step with the advances of the US-British forces in Iraq, though OPEC suggested on Tuesday that its members might cut back production in order to buoy up prices. Another major factor influencing the oil markets is the potential for fat profits for the companies winning contracts for the reconstruction of a country emerging from years of war and economic embargo. The Bush administration - which Poleo describes as "an oil directorate" because of the links between US officials and energy and aerospace firms - has already made clear that it will control the reconstruction contracts, which are estimated to be worth $30 billion to $100 billion. US Secretary of State Colin Powell said Iraqi revenues, particularly those from the oil industry, would serve as resources for rebuilding the country. The first companies to win some of these contracts were International Resources Group, to coordinate humanitarian aid efforts, Stevedoring Services of America, to run the Um Qasar petroleum shipping terminal, and Kellogg Brown & Root, to control oil wells that have been set on fire. The latter is a subsidiary of Halliburton, a major petroleum industry construction firm, which until 2000 was headed by US Vice President Dick Cheney. For the exploitation of the Iraqi oil fields, "It is certain that US and British firms will have priority, and will try to make up for their absence in Iraq during the 12 years of the embargo, and Baghdad to back down from partnership contracts with oil companies from China, France and Russia," said al-Shereidah. Firms from the three countries signed letters of intent for oil development that would require investments of more than $40 billion. The big question now is to what extent those contracts will be respected in the allocations of post-war Iraq. As far as the Iraq National Oil Company, the government enterprise that managed the petroleum industry until now, "it is very possible that it will remain, though it might be partially privatized to facilitate the distribution of percentages the United States will collect for the costs of the war and those earmarked for expenses and investment in Iraq," said al-Shereidah. (Inter Press Service)

</a href=www.washingtonpost.com>Washington Post Thursday, April 10, 2003; Page A24

LA GABARRA, Colombia -- Maria, a wizened 57-year-old farmer's wife, lives in a plank-board shack in Santa Isabel, a village on the River of Gold that serves as Colombia's muddy border with Venezuela.

Shortly after breakfast one day last month, she and several dozen families watched grimly as Colombia's long war arrived swiftly along Santa Isabel's single dirt street. Violence has washed over the village for years, but never in the way she witnessed that sweltering March 21.

Maria and a dozen frightened neighbors said hundreds of guerrillas from the Revolutionary Armed Forces of Colombia (FARC) attacked their town from Venezuela, crossing the river to engage an anti-guerrilla paramilitary force occupying several riverside villages. Within an hour, Maria saw Venezuelan military aircraft swoop over her village to bomb paramilitary positions inside Colombia supporting the rebel advance.

If corroborated by the Colombian government, the bombings would be Venezuela's first military foray into Colombia's civil war. Now Maria and hundreds of others from Santa Isabel and neighboring villages along the border have fled south to this town, terrified that what they saw could get them killed. Colombian officials said they are investigating their account.

"Only the people who live there can serve as witnesses to this, and I am afraid," said Maria, who declined to give her last name for fear of reprisals. "Everybody where I live knows the guerrillas are on the other side of the river, that they maintain their camp there. Everybody knows this. Everybody."

Neglected by the government, too dangerous for Colombia's military, this wild frontier is emerging as a flashpoint that could complicate cooperative efforts to contain Colombia's war within its borders.

The 18,000-member FARC, engaged in a nearly four-decade war with the state, began an offensive late last month to retake this region rich in coca fields and strategic importance from the United Self-Defense Forces of Colombia (AUC). The paramilitary force fights the FARC alongside the Colombian army in much of the country. But here, say refugees and paramilitary commanders who do much of the fighting, they face a new adversary: the Venezuelan military.

According to accounts from a dozen refugees who have arrived here over the last two weeks to escape a fresh surge of fighting, Venezuelan military aircraft bombed paramilitary positions inside Colombia on March 21 and again a week later to the south in a way that helped a rebel scorched-earth campaign gain momentum across the northeastern frontier.

The result has been sharp recriminations between the two governments over who is responsible for keeping a widening civil war inside Colombia's 1,370-mile frontier with Venezuela.

President Alvaro Uribe has called on Venezuela to work harder to rid its side of a lightly governed frontier of the guerrillas, warning that "countries that allow terrorists inside their territory will end up as their victims."

On Wednesday, Venezuela rejected the allegations by border residents that its aircraft bombed the village. Vice President Jose Vicente Rangel dismissed the charges as "a grotesque lie" aimed at trying to discredit Venezuela's president, Hugo Chavez.

Chavez has acknowledged bombing targets last month but said the attacks occurred on his side of the border after a paramilitary "invasion" of Venezuelan territory. Once featured prominently in FARC propaganda posters as a kindred spirit, Chavez has blamed Colombia for the rise in selective killings and kidnappings on the Venezuelan side of the border.

In late March, Rangel accused the Colombian government of allowing paramilitary groups to operate "with absolute impunity" along a frontier that is frequently hard to identify on the ground. But Chavez has refused requests to allow Colombian troops to pursue guerrillas into Venezuela, prompting Colombian officials to wonder why Venezuelan military strikes seem to fall hardest on guerrilla enemies.

While Colombian guerrillas have operated along the Ecuadoran and Peruvian borders, nowhere has Colombia's war tested national boundaries more than in this battered region 310 miles northeast of the capital, Bogota. This frontier of rolling red-clay hills, thick jungle, coca farms and bloody history is known as Catatumbo for one of the slow, muddy rivers that weaves through it. The FARC made the region a key military objective after losing its 16,000-square-mile government-sanctioned haven in southern Colombia just over a year ago.

Colombian military officers here say the FARC, numbering roughly 800 troops in the region, is using Venezuela as it did its former sanctuary -- to stage attacks from a protected refuge -- in seeking to retake the region from paramilitary forces.

Between 1999 and 2000, the AUC carried out a series of massacres here that nearly wiped out civilian support in the former guerrilla stronghold. Hundreds of civilians were killed over several months and some of the bodies were tossed in the river to frighten those downstream. La Gabarra, a warren of abandoned homes and shuttered stores, shrank from 10,000 residents to 2,000 today.

The paramilitary group has since settled into a business partnership with residents, replacing the guerrillas as sole buyers of coca paste that they then sell to others who process it into cocaine. Now the FARC, eager to regain the coca proceeds and an important foothold along the northeastern border, is employing the same harsh tactics the AUC once used against them.

More than 500 people have fled at least a dozen villages in recent weeks, many of them gathering here on a wretched sports field where they are living on food donated from local supermarkets. No government relief has arrived. Nor has the army.

Many of their villages have been reduced to ash by the FARC, which set them on fire after giving residents five minutes to leave or face execution. Along the River of Gold, Maria and her neighbors chose a 12-hour walk to La Gabarra instead of a five-minute canoe ride into Venezuela because, she said, "the guerrillas there will kill us after years of living with the paramilitaries." Hundreds of others made the same choice.

On March 28, according to several refugees who fled the border hamlet of Monte Adentro, Venezuelan F-16s and OV-10s bombed paramilitary positions inside Venezuela and Colombia in what they believe was a response to a series of paramilitary forays into Venezuela in the preceding days. A day later, witnesses said, roughly 300 FARC troops arrived in Monte Adentro to burn it down.

"It is impossible that Venezuelan planes crossed the frontier," said Carlos Rodolfo Santiago, Venezuela's ambassador to Colombia, who acknowledged that the bombings targeted Colombian paramilitaries who he claimed attacked a Venezuelan National Guard post. "We observe international laws on the matter."

At one Venezuelan National Guard post across the River Catatumbo from the Colombian town of Tres Bocas, the mood was relaxed during a visit late last month despite reports of the recent attack upriver. Several soldiers, including the post commander, played dominos at a wooden table as bouncy Colombian music blared from a radio. Two M-60 machines guns sat unmanned in pillbox bunkers. A 60mm mortar tube, pointing toward Colombia, was covered with a dirty rag.

The Colombian army is also a scarce, static presence along these dirt roads. Soldiers guard bridges that span numerous rivers, an important oil pipeline, and the primary highways.

Col. Jose Alfonso Bautista, head of the military's Catatumbo Task Force, based in the municipal seat of Tibu 28 miles south of here, said his 800 men amount to one soldier for every 2.5 square miles of rugged territory. A military map sits on his desk, covered in red arrows that converge at points inside Venezuela that represent guerrilla camps and staging areas.

"Without passing judgment, it is a huge limit for us because just one foot inside and we can do nothing," Bautista said. "Right now this [offensive] is about the FARC retaking this territory. And they have a lot of terrorists trying to do so. The numbers are too big for us at the moment."

As a result, the defense of the region has been left largely to paramilitary forces. Emerging from thick dawn mists, several hundred paramilitary troops marched last month in a long, loose file on the road from Tibu to La Gabarra. Some appeared to be no more than 15 years old. The regional commanders occupy a row of wooden houses in El Mirador on the rise of a hill 10 miles south of La Gabarra. A commander wearing a Colombian Special Forces T-shirt, who is now responsible for repelling the FARC offensive, said Venezuela has become "a shield" to his enemy in a way that fellow AUC commanders have not seen in other border areas.

"The only government that has this position is President Chavez's -- not in Peru, not in Ecuador," said the commander, who called the recent bombing "clear support" for the FARC. One afternoon late last month, on the highway south from Tibu, a small FARC patrol appeared out of a narrow creek to stop traffic. They torched four trucks before shrinking back into the jungle, leaving the asphalt a singed, sticky mess. Now, an army patrol was here, standing in the shadows of the burned trucks. Asked how the guerrillas carried out the attack and escaped in broad daylight, a corporal waved his hand.

"They went that way," he said. "Toward Venezuela."

• Post correspondent Scott Wilson discussed Alvaro Uribe's victory in Colombia's recent presidential election and the future of U.S. involvement there. _Special Report • The evolution of the U.S. role in Colombia's Civil War _ Desde Washington • Colombia Gets Bush's Embrace: Once kept at arms length by Washington, the Colombian armed forces will get direct military assistance under the president's 2004 budget proposal.    • While war rages in Iraq, a huge manhunt for three Americans captured by leftist rebels in Colombia has gone virtually uncovered in the U.S. press.   

April 9, 2003, 3:53PM Reuters News Service

NEW YORK -- Oil prices gained today as Saddam Hussein's rule over Iraq collapsed and OPEC considered cutting back extra supplies, pumped mainly by Saudi Arabia to head off a war spike in energy costs.

U.S. light crude oil on the New York Mercantile Exchange jumped 85 cents, or 3 percent, to $28.85 a barrel. London Brent blend was up 65 cents at $25.25 a barrel.

Trade was slow as dealers watched events unfold in Baghdad.

"Since the invasion of Kuwait in 1990, Iraq has been a perennial feature of the world oil market, so it wasn't surprising people sat back today just to watch," said Peter Gignoux, head of the London energy desk at Citigroup.

Amid wild scenes, jubilant Iraqis welcomed advancing U.S. forces in the Iraqi capital and rampaging looters attacked symbols of Saddam's power. Thousands of U.S. troops moved into the center of the Iraqi capital, meeting little resistance.

There was no word on the fate of Saddam or his sons, targeted on Tuesday by U.S. planes that bombed a residential area in Baghdad thought to be housing the Iraqi leader.

U.S. forces said there were still battles to fight in northern Iraq and in Saddam's hometown of Tikrit, north of Baghdad.

Dealers said expectations were that an OPEC emergency meeting later this month will rein in galloping production to avert a potential price collapse in the second quarter, when demand tails off after winter.

Oil prices have fallen heavily from prewar peaks but prices are still near the middle of OPEC's $22-$28 target range for an index of cartel crudes.

OPEC at the April 24 gathering is expected at least to erase excess supplies of some 2 million barrels a day now being pumped above formal output limits of 24.5 million bpd.

It may also consider reducing those quota limits.

Two oil ministers -- those from the UAE and Algeria -- say a renewed commitment to existing quotas would probably be sufficient to balance supply and demand.

"It is possible that just by abiding by quotas we could reestablish a good balance in the market because we have to be concerned about it beyond this quarter," said Algerian Oil Minister Chakib Khelil.

"We have to be concerned about summer when demand for gasoline increases so we can't just make a decision now and see prices taking off in the summer," he told reporters in Paris.

Leading OPEC producer Saudi Arabia pushed output 1.5 million barrels a day above its official quota to help cushion the impact of the loss of Baghdad's 1.7 million bpd of exports during the U.S. invasion of Iraq.

"I expect OPEC to announce a more prudent production policy to accommodate rising production from Venezuela and Nigeria and Iraq in the next three to four months," said energy analyst Gordon Kwan at HSBC in Hong Kong.

"They will probably tighten up compliance to production quotas because it will be difficult for them to cut until there is clear visibility to the market that Iraq will restore exports," said Kwan.

Extra OPEC oil has helped lift low U.S. crude inventories in recent weeks, but the latest data released today recorded a surprise fall. The U.S. government's Energy Information Administration said inventories fell 3.6 million barrels to 277 million last week.

The prospect of Iraqi crude staying out of the market for some time yet hardened when a U.N. official confirmed on Tuesday that exports were unlikely to resume in the near future.

The United Nations oversees the oil-for-food program that allows Iraq to sell crude in exchange for humanitarian aid under U.N. sanctions imposed after it invaded Kuwait.

Benon Sevan, undersecretary-general in charge of oil-for-food for Iraq, said oil under contract and not yet lifted or oil stored in the Turkish Mediterranean port of Ceyhan would stay there until a competent authority was available.

The U.S. military has said it will take about three months to resume exports from the big southern Iraqi Rumaila oilfields. The military has still to take control of Iraq's northern oilfields around Kirkuk.

<a href=www.voanews.com>VOA News 10 Apr 2003, 11:36 UTC

El vicepresidente de Venezuela José Vicente Rangél, negó alegaciones de que aviones de Venezuela bombardearon objetivos en Colombia, en apoyo a rebeldes izquierdistas.

En declaraciones a la Asamblea Nacional ayer, el mandatario calificó las acusaciones de, y citamos sus palabras, un arsenal de mentiras destinadas a desacreditar a Venezuela y a su gobierno.

Residentes de la frontera colombiana alegaron que un avión militar venezolano pasó la frontera el mes pasado lanzando bombas sobre una aldea donde guerrilleros izquierdistas estaban combatiendo con grupos paramilitares de derecha.

Autoridades de Venezuela y Colombia dijeron que la frontera entre ambas naciones fué escenario de numerosos enfrentamientos entre el ejército y grupos paramilitares.

El presidente de Venezuela, Hugo Chávez y su contraparte colombiano Álvaro Uribe tienen programado reunirse a fines de este mes,para discutir sobre tensiones fronterizas.

Posted on Wed, Apr. 09, 2003 CHRISTOPHER TOOTHAKER Associated Press

CARACAS, Venezuela - Tucked away in one of Caracas' poorest districts, Radio Perola is raising the hackles of Venezuela's big media executives.

From a room the size of a walk-in closet, Radio Perola - and dozens of other small, government-sponsored stations - broadcast programs supporting President Hugo Chavez and his self-proclaimed revolution.

Chavez argues the stations counter opposition-allied commercial broadcast media that don't address issues vital to Venezuela's poor. Media executives argue the unlicensed stations interfere with their signals and are Chavez propaganda machines.

"They use frequencies that overlap those of other stations, and all they do is spread government propaganda," said Miguel Martinez, president of the Venezuelan Chamber of Broadcasting Industries.

"We aren't neutral," concedes Radio Perola manager Carlos Carles. "We have a position. It just so happens that most people here in this district support the president."

Chavez, a former paratroop commander who was elected in 1998 and re-elected in 2000, frequently accuses Venezuela's news media of conspiring to overthrow him. Many private broadcasters promoted a recent two-month general strike to demand Chavez quit. Now Congress, dominated by Chavez's ruling party, is considering legislation to strictly regulate broadcast content.

"It's no secret that the private media is against Chavez. That's why the government turns a blind eye to the abuses by pro-Chavez community radio," said opposition lawmaker Alberto Jordan, a member of Congress' media committee. "Many are operating in a clandestine form, moving from place to place so they can't be located."

Dominated by ruling party members, the media committee has shelved complaints, said Jordan.

At Radio Perola, disc jockeys spin tunes by the late folk singer Ali Primera, a social activist. Guests announce workshops for single mothers or meetings on neighborhood problems.

"Most of our programming focuses on community issues," Carles said in a room sporting photos of Ernesto "Che" Guevara and Chavez and pro-government graffiti.

Licensed private stations complain there are too many loopholes in legislation regulating community radio, and that the government permits abuses. Alvin Lezama, an executive at the state-run communications watchdog, says new rules will allow citizens, rather than the government, to regulate noncommercial stations.

"What is the best way to control this? That the communities take possession of these stations," Lezama said.

"We have to open channels so consumers control their media outlets because we are never going to have the technology or human resources to do it," added Lezama. "It's a truly revolutionary idea."

The rules put the same limits on signal strength for both commercial and community broadcasters. But community stations routinely exceed those limits.

"They are a threat. Our signal has been affected in some cities ... including Caracas and Maracaibo by these community stations," said Antonio Serfati, executive vice president of Union Radio, which broadcasts nationwide.

"Interference isn't the only problem. They broadcast more advertising than they are allowed to and don't pay taxes," added Serfati.

Community radio stations are permitted 5 minutes of advertising each hour. In a nod to local development, no more than half the ads can promote companies that don't operate within the station's respective "community."

Private radio owners also complain that many community stations violate a rule demanding they "abstain from transmitting partisan or propaganda messages" and "avoid discrimination due to political beliefs."

"They constantly talk about the marvels of Chavez's revolution," said Alejandro Hiduera, owner of the Radio Reloj AM-FM station in western Zulia state.

It's unclear how many community stations exist. Conatel, Venezuela's telecommunications agency, says 13 have been licensed. The National Association of Free and Alternative Community Radio says there are 23. Jordan claims there are more than 130.

Carles denies his station receives government money, as private media owners claim. Makeshift studio microphones, beat-up amplifiers and frayed cables appear to support his claim.

"Communication is a right of all individuals, not a business for a privileged few," said Carles.