Chris Varcoe
<a href=www.canada.com>Calgary Herald
Saturday, May 03, 2003
Despite record crude oil production, the value of Canada's energy exports sank 18 per cent last year as natural gas prices slumped through most of 2002.
The National Energy Board says gross export earnings from selling natural gas, oil, coal and electricity dropped to $43 billion in 2002, down from $52 billion in 2001.
While crude oil output rose six per cent to a record 2.33 million barrels per day -- Canada is one of the 10 largest producers in the world -- natural gas production slipped slightly.
As well, gas prices plunged through the first half of the year, affecting the value of Canadian imports, according to the annual report released this week by the federal energy regulator.
"The reason we saw a decline in export revenues is directly tied to the (commodity) prices we received," Bill Wall, an NEB technical specialist, said Friday.
"Overall, our volumes are quite strong and increasing, especially for crude oil."
Canada's energy sector is a key driver of the economy, employing almost 300,000 people and accounting for six per cent of gross domestic product.
Canada is the largest oil and gas supplier to the U.S., outstripping rivals such as Mexico, Venezuela and Saudi Arabia.
For oil companies, crude production hit record levels last year as a new project started off the East Coast and oilsands developments expanded in northern Alberta.
Oil companies sold $17.6 billion of crude outside the country in 2002, up from $15.7 billion in 2001.
Crude prices averaged $26 US a barrel in 2002 as markets surged in the fall and winter due to geopolitical tensions in the Middle East.
The flow of oil from offshore Newfoundland and Labrador almost doubled with the beginning of the Terra Nova oil project and increased production from Hibernia.
In Western Canada, oil output also jumped, driven by a 25 per cent hike in synthetic crude coming from oilsands developments.
The report also highlighted the continuing decline of conventional oil production, which fell 5.2 per cent, as the Western Canadian Sedimentary Basin matures.
Unlike oil, Canadian spot prices for gas dropped last year, plunging below $2 a gigajoule last summer as demand fell.
"The reason gas prices dropped was a weakening North American economy, especially in the United States," said Roland George, senior principal with energy consultancy Purvin & Gertz in Calgary.
"If your economy is slowing down, your need for energy also slows down."
Prices remained soft until late in 2002, but soared above $14 a gigajoule in February due to tight continental supplies and cold weather.
Total Canadian gas production fell one per cent to 17 billion cubic feet a day. Drilling levels were slashed in 2002 due to the weaker prices, and the prolific Ladyfern gas field reported a steep decline in production.
Revenue from gas exports fell by almost a third to $26 billion, as gas prices were off 28 per cent from 2001 levels.
For electricity producers, power exports hit their lowest level since 1993. Power export revenues fell 57 per cent from a year earlier to $1.8 billion.
<a href=www.agi.it>AGI Online
NEW ITALIAN AMBASSADORS IN VENEZUELA AND ARMENIA
(AGI) - Rome, Italy, May 3 - The new Italian ambassadors to Venezuela and Armenia, who were recently nominated by the Cabinet, have been confirmed.
Here is an outline of the two diplomats: - Gerardo CARANTE, Italian ambassador to Caracas Born in San Salvatore Monferrato (Alexandra) on December 22, 1945, he graduated in law at the University of Genoa in 1968 and in political science at the University of Pavia in 1973. He started his diplomatic career in 1970. In 1986 he was senior advisor at the Permanent Italian Delegation at the United Nations in New York and then in Athens. Back in Rome in 1990 at the General Office for Cultural Relations, in 1992 he left his role to be of service to the prime minister and then to the ministry of justice. In 1993 he was the senior advisor in Moscow. In 1997 he was appointed minister of plenipotentiary and the following year went to the Permanent Italian Delegation at the Organization for Economic Co-operation and Development (OECD) in Paris as advisory minister. In 2001 he came back to Rome to work in the General Office for economic co-operation and multi-lateral finance. - Marco CLEMENTE, Italian ambassador to Erevan Born in Rome on June 29, 1959, he graduated in political science at the "LUISS" University in Rome in 1984 and began his diplomatic career in 1985. Between 1987 and 1990 he was at Canberra and then Consul in Caracas until 1994, when he returned to the ministry at the General Office for political affairs. From 1999 he was consul general at Johannesburg. In 2002 he was appointed advisor to the embassy. (AGI)
031508 MAG 03
ChevronTexaco Corp.'s first-quarter net income jumped 165 percent, to $1.92 billion from $725 million a year ago, as high oil prices more than offset a decline in crude oil production and as U.S. refineries returned to profitability with a boost from California motorists.
"In summary, the company had a very strong quarter," Chief Financial Officer John Watson said in a conference call with Wall Street financial analysts.
Shares of ChevronTexaco rose $2.35, or 3.7 percent, Friday to close at $65.35 after the company's early-morning announcement that per-share net income was $1.81 for the three-month period ended March 31, compared with 68 cents a year ago.
Excluding a charge to reflect the cost of an accounting change, ChevronTexaco posted net income of $2.12 billion, or $1.99 a share. That beat the $1.81 a share consensus estimate of 19 analysts surveyed by First Call/Thomson Financial and the 88 cents a share of a year ago.
The latest numbers tasted like a refreshing drink after a long drought for holders of ChevronTexaco shares, which closed at $90.89 on the day of the October 2001 merger that created the company, said Fadel Gheit, an analyst for Fahnestock & Co. Gheit owns ChevronTexaco stock but Fahnestock does not do investment banking business for the oil giant.
Still, questions remain about ChevronTexaco's future prospects, especially its ability to expand oil reserves and boost production, said Tina Vital, a stock analyst for Standard & Poor's, a market information service. Vital does not own the stock.
In January ChevronTexaco shelved its target of an annual growth rate of 2.5 percent to 3 percent for reserves and production, a goal Chief Executive Dave O'Reilly announced in November 2001. The company has begun selling less profitable oil and gas reserves and, according to Vital, begun a review of its reserve and production growth goals. Fred Gorell, a ChevronTexaco spokesman, said the company as a matter of policy would not comment on whether or not an internal review is under way but that there is currently no specific target for growth.
Failure to deliver on earlier growth promises, along with losses from an investment in Dynegy, a troubled energy marketer, put ChevronTexaco's stock "in the penalty box for the last year and a half," Gheit said. But in the first quarter, he added, "higher prices made investors forgive all (the company's) sins."
Those higher prices worked their way through to ChevronTexaco's bottom line. Profits from U.S. crude oil production more than tripled to $1.02 billion, excluding an accounting charge, from $304 million a year ago. Hefty price hikes powered the advance, as the average selling price for a barrel of domestic petroleum liquid was $29.14, compared with $16.90 a year ago. Daily production dropped to 577,000 barrels from 619,000 barrels a year ago, as yields dropped from older wells and storm damage to some Gulf of Mexico wells proved too expensive to repair.
Higher prices produced a smaller profit gain from international exploration and production, to $1.10 billion from $837 million. The average take from a barrel of liquid lifted outside the United States rose to $29.63 a barrel from $19.02. Production slipped to 1.7 million barrels a day from 1.8 million a year ago. Civil unrest in Nigeria and Venezuela and a work project in Angola slowed output, and quirks in a production sharing arrangement in Indonesia lowered output.
California gasoline prices that stayed above $2 a gallon for much of the quarter boosted margins -- the spread between wholesale prices and crude oil costs -- at ChevronTexaco's West Coast refineries, which include large California producers in Richmond and El Segundo. That spread averaged $20.30 a barrel, or 48 cents a gallon, compared with $12.27 a barrel, or 29 cents a gallon, a year ago. West Coast margins were more than double those for ChevronTexaco's other U.S. refineries. Nationwide, daily refinery output declined to 814,000 barrels from 868,000 barrels a year ago. But that was enough to restore profitability, to the tune of $70 million, in a segment that lost $154 million a year ago.
International refining and marketing profits rose to $245 million from $93 million year ago.
Strong sales of jet fuel to the military contributed to higher refined product sales.
Watson said ChevronTexaco has met its merger target of $2.2 billion a year in operating cost reductions but is looking to squeeze out further savings. "The pressure is on to deliver lower operating expenses across all of our businesses," he said.
But Vital, who has a hold rating on the stock, said that until ChevronTexaco shows how it plans to grow output "people are a little cautious" about the company.
Posted on Sat, May. 03, 2003
By Alex Lawler
Bloomberg News
LONDON - Royal/Dutch Shell Group and ChevronTexaco said first-quarter profits more than doubled, capping a week of record oil earnings, because prices surged amid war in Iraq and supply disruptions in Nigeria and Venezuela.
Shell, Europe's largest oil company by market value, said net income jumped to $5.33 billion from $2.26 billion in last year's first quarter. At ChevronTexaco, the No. 2 U.S. oil company, profit rose to $1.92 billion from $725 million. Sales climbed 53 percent at Shell and 46 percent at ChevronTexaco.
The combined first-quarter profits at the two companies and rivals ExxonMobil and BP tripled to $17.8 billion as crude-oil prices climbed to a 12-year high and refining margins widened. Prices have since fallen by a third, signaling lower earnings over the rest of this year.
``The question after a quarter like this one is, what do you do for us next?'' said James Halloran, who helps manage $24 billion, including nearly 1.3 million ChevronTexaco shares, at National City Wealth Management.
After adjusting for one-time items and changes in the value of inventories, Shell's profit increased 96 percent to a record $3.91 billion, beating the average estimate of $3.67 billion in a Bloomberg survey of analysts.
ChevronTexaco's profit was the highest since the company was formed through Chevron's purchase of Texaco in 2001. The company's exploration and production earnings rose 73 percent from a year earlier to $1.97 billion. Profit from oil refining was $315 million after a $61 million loss a year earlier.
Higher natural-gas prices, spurred by colder-than-normal weather across much of the United States, contributed to the profit gains. The average first-quarter price for U.S. gas futures more than doubled from a year earlier to $5.32 per million British thermal units.
This may be a high-water mark for the oil companies,'' said Tim Ghriskey, who manages $100 million in assets, including an undisclosed number of ChevronTexaco and Exxon Mobil shares, at Ghriskey Capital Management LLC. Oil prices have already dropped, and you are likely to see second-quarter profits lower.''
Higher prices didn't prompt Shell, ChevronTexaco and other oil companies to boost investment in exploration and production, largely because the gains weren't expected to hold.
ExxonMobil, based in Irving, Texas, is the world's biggest investor-owned oil company by market value. The company yesterday reported that first-quarter profit more than tripled to $7.04 billion. London-based BP, the No. 3 oil company by market value behind Exxon Mobil and Shell, on Tuesday said its profit quadrupled to a record $3.47 billion.
Meanwhile, crude oil prices rose a third day, bolstered by slowing imports into the U.S., where inventories are 10 percent lower than average for this time of year.
An equestrian expedition crosses the Venezuelan Andes on a trail blazed by Spanish conquistadors in their quest for the mythical El Dorado
By MARK EVELEIGH
Special to The Globe and Mail
Saturday, May 3, 2003 - Page T5
MERIDA, VENEZUELA -- The Caribbean trade winds having chilled in their run up the steep Andean slopes, we spurred our horses onward in an effort to get to shelter before nightfall. Though palm-fringed beaches lay only 160 kilometres to the north, it was easy to appreciate the mingled feelings of fear and respect that this landscape of eerie, swirling mists evoked in the first Venezuelans. To them, the high sierras were the domain of evil demons, and the phrase pasar el páramo -- to cross the highlands -- is still used as local slang for dying.
The immense panoramas seemed to emphasize the insignificance of our horse-and-mule caravan, and from up ahead I could hear the encouraging voices of the muleteers as they drove the cargo animals over the ridge. The rest of our motley European "pioneer column" stretched back down the winding trail, and far below I could just make out the red jacket of Paul Coudenys. As owner of the memorably named Hippo-Trek, Coudenys has ridden in 50 countries around the world. But even for him, this Andean crossing would be a first. At around 4,400 metres, we were probably the highest riders in the world, and were almost certainly the first foreign team to follow this route since the Spanish conquistadors blazed the trail in their quest for the mythical El Dorado.
Of course, we were benefiting from 500 years of hindsight. We allowed time to acclimatize to the altitude. We had teams of more than 20 fresh, local mounts and cargo animals for every new section of the trail so that there would be no need to force lowland horses into activity at dangerously high altitudes. And we had the guarantee of a warm bed -- or perhaps a sleeping bag on the veranda of a ranchito -- and a nightcap of (even warmer) Venezuelan rum at the end of each day's ride. Still, it was a scary sensation to be leaning back over a swaying rump as the horses climbed these steep mountain trails, often bordered by sheer drops.
Already, we seemed to be an entire world away from the terrain the group had ridden through earlier in the week. We had left the swampy cattle country of Los Llanos and within three days had climbed into the virgin rain forest that shrouds the branch of the Andes known as Sierra Nevada.
The Canagua River, rushing to join the mighty Orinoco, began to tumble with increasing ferocity, and we had to dismount occasionally to lead our horses across a chain of swaying suspension bridges.
We spent a whole morning on a steep, slippery climb through a cloud forest, but in mid-afternoon on day five, we rode out into a region of wide, grassy meadows where the horses broke into a cheerful canter.
Then, quite suddenly, we were on the bleak moors of the high paramo. The dripping lianas and moss-shrouded trees of the tropical forest were replaced here by alien, spiky-headed frailejon plants and lichen-covered rocks. Up here we were more likely to see a wheeling condor than a flock of bickering parrots, and the countless hummingbirds that had buzzed around us in the steamy valleys below were replaced by a single, hardy species that hibernates every night in order to survive the chill.
After spending several days cocooned in the forest, the wide-open spaces of the mountains seemed intimidating. The narrow trail that zig-zagged endlessly upward was known by the muleteers, apparently without irony, as la carretera (the highway).
The steady five-kilometre-per-hour days -- providing equal opportunities for exploration and contemplation -- were occasionally broken by short, exciting canters across flat Andean meadows. The highland horses were spirited enough to enjoy this, and during one wonderful gallop, my mare was accompanied by her mate and a yearling foal that dashed in front, kicking up his heels like a gangly bronco.
The mare was the last of the chain of horses and mules that I rode during the trek. An unexpected advantage of this equestrian variety was that we had the chance to meet and travel with muleteers and guides from almost every village in this part of the Sierra Nevada.
The conquistadors found nothing to keep them here, and it seems that even today the local population is struggling to find a reason to stick around.
One in three Venezuelans live in Caracas, and in each of the isolated villages we rode through, boarded-up houses stood testament to a growing exodus of campesinos (villagers) toward the slums of the capital city. The town of El Carrizal was an extreme example of what is happening all over what was once one of South America's richest countries. Founded 150 years ago, El Carrizal quickly grew to become a successful farming village, with rich harvests of bananas, avocados and coffee. Only a few decades ago it was a thriving community of 100 families. Today it is home to just six people.
A Venezuelan foundation, Programa Andes Tropicales, is concentrating on this region in its efforts to promote sustainable tourism that could tempt the campesinos back to the countryside. The philosophy is that Don Rafael, patriarch of El Carrizal's last family, should be able to make about half of his yearly income through offering accommodation to travellers such as ourselves, while other people in the area could provide food or mules, or work as guides. The fact that they would not be able to live entirely from tourism would mean that they would also have to maintain their traditional lifestyle so that their farming traditions would not be lost.
As we wandered back through the deserted village, Rafael showed us around the church that he hopes will once more warrant a visit from the mule-riding priest who used to come here every Sunday. Eating hot pisco Andina (fish and egg soup) with slices of wonderful smoked cheese and arepas (cornmeal cakes) in Raphael's kitchen, it was easy to wonder what life was like for the former residents of El Carrizal, now in Caracas.
Rafael's courtyard that evening saw its first nightlife in some time with the muleteers producing a guitar and singing along with joropo, Venezuela's national music. Many of the songs dealt with the exploits of their hero Simon Bolivar, who during the course of his campaigns against the Spanish in the 19th century, is said to have ridden the equivalent of three times around the world -- and fallen in love 50 times.
Our little expedition was never destined to become the subject of the next generation of joropos, but by the time we crested the highest point of the paramo and began our descent toward the bright lights of Merida, I had ridden four horses and three mules, worn the seat right out of a brand new pair of corduroy trousers -- and quashed for a while my ability to salsa.
If you go
GETTING THERE
There are more than a dozen flights daily to Merida from Caracas. The main airlines serving the route are:
The best time to visit Venezuela is in the dry, cool season during the northern hemisphere's winter.
The hot, wet season extends from May to October, with temperatures averaging between 25 and 31 degrees.
WHAT TO BRING
Pack for all climates. Bring a couple of pairs of thick trousers with flat inner seams and -- for a worst-case scenario -- a family-size jar of Vaseline.
GETTING AROUND
Hippo-Trek specializes in equestrian travel everywhere from Iceland to the Sahara. Phone: 32 (50) 611785; Web: www.hippotrek.com.