<a href=www.vheadline.com>Venezuela's Electronic News Posted: Friday, May 09, 2003 By: Dawn Gable

Date: Fri, 09 May 2003 18:31:48 +0000 From: Dawn Gable morning_ucsc@hotmail.com To: Editor@VHeadline.com Subject: return to the dark ages?

Dear Mr. Rivero: If your kind of thinking <a href=www.vheadline.com>had prevailed throughout history, we would still be living in the stone ages. Progress of humanity does not happen through stagnation and dogmatism. The founding fathers of our great nation (USA) killed and died in their revolution to put in motion an experimental new social structure which has created a lifestyle far better than any ever seen before on this planet.

But it was considered heretical, and dangerous to our European ancestral nations in those days of Kings and Queens and Priests.

What about the abolition of slavery? Should we have shied away from that controversial social restructuring? How about the giant leap into the scientific age that has allowed humans to enjoy a more comfortable and longer life? Maybe we should still be using electro-shock therapy, leeches and exorcisms to cure the ill.

Face it, globalization is forcing us to create a new paradigm. And yes, experimentation and change are dangerous and sometimes costly. But, would we really rather resign to wallow in the mess that we are in today?

For those of us in the so called First World, it is easy to be satisfied with not rocking the boat.  But for those billions that are living in squalor, with nothing to lose, taking risks is the only option.

Those of us living in comfort should be brave enough to seize our role in history and join our fellow men/women on this journey forward.

History has shown that civilizations unwilling to evolve have crumbled into dust.

Dawn Gable morning_ucsc@hotmail.com

<a href=www.vheadline.com>Venezuela's Electronic News Posted: Friday, May 09, 2003 By: Jose Gregorio Pineda & Jose Gabriel Angarita

VenAmCham's Jose Gregorio Pineda (chief economist) and Jose Gabriel Angarita (economist) write: The Foreign Exchange Administration Commission (CADIVI) set up on January 21, 2003 continues to be at the center of a debate among national and international analysts, who worry that the reasons for its behavior may be political rather than economic. The government is viewed as trying to gain political ground and channel foreign exchange in a discretionary form to alternative productive enterprises politically allied with it.

There are no good reasons for the exchange controls to continue in force, or in their present form at any rate. The main argument against the inefficient foreign exchange restriction lies in the 3.353 billion recovery of foreign reserves since January. This is, in any case, a fairly small growth considering that oil exports have reached 3.2 million barrels per day.

Why have the reserves not grown more rapidly?

One of the factors the advocates of these government interventions in the economy may be underestimating is the terrible damage being done to the economy as a whole. They are provoking an enormous contraction of productive activity, raising unemployment, and generating shortages of staple foods and medicines.

A great many recommendations have been made to the government and Cadivi regarding the undesirability of keeping the exchange controls in force. Spokesmen for the Central Bank of Venezuela (BCV) and he Venezuelan Banking Association (ABV) have expressed concern about the Commission's delay in distributing foreign exchange; US$1.2 billion are available but only about 100 million have actually been authorized.

Commission members and the President of the Republic himself have spoken out in favor of the controls and ruled out any possibility of lifting them, in the short term at least. There is no clear posture regarding a potential relaxation of the supply of dollars.

A great deal of controversy has been generated in the national private sector, which tends to believe the controls are intended only to punish the opposition by preventing trade with the rest of the world in the goods and inputs needed for import and export operations. If the foreign exchange market is not opened up and dollars distributed to the different sectors of the economy, this argument will become ever more convincing. But the controls do not only harm the opposition; they injure all participants in the national economy, and especially the population by raising unemployment and provoking shortages of goods.

BW5425 MAY 09,2003 14:14 PACIFIC 17:14 EASTERN     Business Editors

    CHICAGO--(<a href=www.businesswire.com>BUSINESS WIRE)--May 9, 2003--Fitch Ratings has affirmed the 'BBB-' senior secured debt rating of HOVENSA LLC (HOVENSA), and has removed the rating from Rating Watch Negative. The rating applies to HOVENSA's $272 million senior secured term loan due 2008, $150 million senior secured reducing bank revolver due 2007 and $126.8 million senior secured tax-exempt bonds due 2021. HOVENSA is a limited liability company which owns and operates a crude oil refinery in the U.S. Virgin Islands. The refinery, which has the capacity to process up to 495,000 barrels per day (bpd) of crude oil, is indirectly owned 50% by Amerada Hess Corporation (Hess) and 50% by Petroleos de Venezuela (PDVSA).

    As detailed in the Dec. 20, 2002 Fitch press release 'Fitch Places HOVENSA's Senior Secured Debt on Rating Watch Negative', the Rating Watch Negative status reflected the suspension of crude oil and feedstock supply from PDVSA and related entities as a result of the national strike in Venezuela, which lasted two months, from early December 2002 until early February 2003. PDVSA is contractually obligated to supply approximately 60% of HOVENSA's crude feedstock requirement under two crude oil supply agreements (155,000 bpd of Mesa and 115,000 bpd of Merey). While the ability of PDVSA to honor its crude supply obligations is a key determinant of HOVENSA's credit quality, the refinery does have the operating flexibility to process a wide variety of crude oils. Throughout the strike, HOVENSA was successful in acquiring substitute crude oils from a wide variety of sources at volumes sufficient to maintain relatively high operating rates. HOVENSA began receiving a portion of its contractual volumes from PDVSA in late January 2003 and has been receiving 100% of contractual volumes since the beginning of March 2003.

    HOVENSA's liquidity position has improved substantially over the past few months primarily as a result of the solid operating performance and favorable refining margins, resulting in record EBITDA of $132 million for the first quarter of 2003. In addition to the revolver being untapped, and a fully funded debt service reserve, HOVENSA currently has approximately $200 million of cash on hand. Last week, HOVENSA prepaid $78 million of its senior secured term loan, representing scheduled principal payments due in December 2003 and June 2004. Fitch believes the debt prepayment reflects conservative financial management, a credit positive given the cyclical nature of the oil refining industry.

    While HOVENSA's present liquidity position is strong, the refinery's planned capital expenditure program (Clean Fuels Program) needed to comply with recently enacted low sulfur gasoline and diesel regulations requires a significant financial commitment over the intermediate term. As such, Fitch is concerned with the significant estimated cost of the Clean Fuels Program (approximately $450 million planned to be spent over the next four years) and the potential strain on liquidity. While HOVENSA has some flexibility related to the timing of the program, Fitch is also concerned that a significant delay of the Clean Fuels Program could hinder the refinery's ability to sell into the U.S. market. The new Environmental Protection Agency (EPA) standards go fully into effect in January 2007.

    HOVENSA's debt is currently supported by completion guarantees from the sponsors, which will remain in place until financial completion of the delayed coker project is achieved, which is expected in the coming months. While HOVENSA is a joint venture, Fitch believes the refinery is a strategically important asset to Hess and as such, Fitch continues to view Hess's committed sponsorship as a key factor in HOVENSA's debt rating. Fitch currently rates the senior unsecured debt of Hess 'BBB-'.

--30--EB/sf*

CONTACT: Fitch Ratings
         John W. Kunkle, CFA +1-312-606-2329
         Caren Y. Chang, +1-312-368-3151
         Bryan Caviness, +1-312-368-2056, Chicago
         Alejandro Bertuol, +1-212-908-0393, New York
         James Jockle, +1-212-908-0547, New York, Media Relations

KEYWORD: NEW YORK
INDUSTRY KEYWORD: BANKING BOND/STOCK RATINGS
SOURCE: Fitch Ratings

<a href=www.vheadline.com>Venezuela's Electronic NewsPosted: Friday, May 09, 2003 By: Gustavo Coronel

VHeadline.com commentarist Gustavo Coronel writes: The Offshore Technology Conference is held every year and brings together hundreds of technicians, managers and executives of petroleum producing, service and consultancy companies from all over the world. This year the OTC was held in Houston, Texas ... the event chosen by Ali Rodriguez, the current president of PDVSA, to promote the "new" company to the international petroleum community.

To this effect he ordered the preparation of a presentation on PDVSA's plans and opportunities for foreign investment in the Venezuelan petroleum sector. The objective was to generate enough interest to attract up to $20 billion in new private investments for the next five years or so.

Off they went to Houston ... a group of some 75 persons led by Rodriguez who, as president with his immediate collaborators traveled in private jets, with the lesser mortals in commercial airline, taking advantage of a special fare of about $500 round trip per person.

Half of the group checked into the Hotel Saint Regis, $320 per person, and the other half into the Houstonian Hotel, $270 per night or so.

Meeting rooms were arranged for several events: A Monday morning breakfast, the presentation, a luncheon with Venezuelan students and a press conference, at a cost of some $60,000. The staff made preparations for the limousines, cocktails, documents to be distributed and the Mont Blanc fountain pens to be given as gifts to senior managers of important companies, duly engraved with their names. All in all the costs involved were of the order of some $600,000.

This would not be an inordinately high amount if the objectives of the trip were fulfilled. But this was not to be the case but, according to independent reports which I have received from four people in attendance, the event took off on the wrong foot for Rodriguez, when the "Houston Chronicle" published an op-piece by two University of Houston professors in which a very unfavorable evaluation of the technical level of the PDVSA delegation was given.

This was followed by poor reception given by the audience to the PDVSA presentation Monday, May 5.  The reasons were the low quality of the presentation and the exaggerated political flavor of its contents ... while insufficient commercial and technical data were presented.

To make things worse, at the Wednesday lunch there was a presentation by Luis Vielma (former Director of PDVSA Exploration & Production and one of the dismissed managers).  Rodriguez desperately tried to block the presentation without success, since Vielma has an impeccable reputation in petroleum circles. Vielma's presentation was in front of a full house and I would like to quote literally an email received from a US manager at a front-ranking consultancy firm:

Today, at lunch time I had the great fortune of witnessing a truly great performance by your fellow countryman Luis Vielma. His presentation at OTC was just absolutely superb; sensitive, informative, clear and truly professional. You would have been very, very proud ... I was there, as a friend and as a Society ... Board member. He received a standing ovation on more than one occasion ... the room was packed... It was clearly evident why he was a leader of the great PDVSA. Kind regards,

This was more than Rodriguez Araque could handle. According to analyst Alexandra Beech, mbeech@nyc.rr.com, he immediately pulled the entire PDVSA delegation out of the conference and cut their stay short ... he failed to appear in a meeting where he was supposed to talk about investment opportunities in Venezuela and left his Trinidadian counterpart on the panel to cover all bases ... he also failed to appear at the luncheon for Venezuelan students ... which was cancelled ... as well as the press conference, equally cancelled.

Such an abrupt retreat from this important conference places the "new" PDVSA in a very unfavorable light in the eyes of the international petroleum community. It is one more example of the mess the revolutionary managers at PDVSA have created.

This is why I insist that the mentioning of these embarrassing events is not what causes the discrediting of the company and of the country abroad ... the damage has been done by the incompetence and mediocrity of Ali Rodriguez Araque and his collaborators.

The successful presentation by Luis Vielma contributed to compensate for the disastrous performance of the "new" PDVSA and ... at least ... made it known to the audience that there are Venezuelans who can be professional and competent.

I hope it will be sometime before Ali Rodriguez dares to appear again in front of true oil managers.

Gustavo Coronel is the founder and president of Agrupacion Pro Calidad de Vida (The Pro-Quality of Life Alliance), a Caracas-based organization devoted to fighting corruption and the promotion of civic education in Latin America, primarily Venezuela. A member of the first board of directors (1975-1979) of Petroleos de Venezuela (PDVSA), following nationalization of Venezuela's oil industry, Coronel has worked in the oil industry for 28 years in the United States, Holland, Indonesia, Algiers and in Venezuela. He is a Distinguished alumnus of the University of Tulsa (USA) where he was a Trustee from 1987 to 1999. Coronel led the Hydrocarbons Division of the Inter-American Development Bank (IADB) in Washington DC for 5 years. The author of three books and many articles on Venezuela ("Curbing Corruption in Venezuela." Journal of Democracy, Vol. 7, No. 3, July, 1996, pp. 157-163), he is a fellow of Harvard University and a member of the Harvard faculty from 1981 to 1983.  In 1998, he was presidential election campaign manager for Henrique Salas Romer and now lives in retirement on the Caribbean island of Margarita where he runs a leading Hotel-Resort.  You may contact Gustavo Coronel at email gustavo@vheadline.com

<a href=www.vheadline.com>venezuela's Electronic News Posted: Friday, May 09, 2003 By: VHeadline.com Reporters

PUBLIC AI Index: AMR 53/007/2003 09 May 2003 UA 130/03 Fear for Safety

VENEZUELA

Miguel Diaz Loreto (m) Dinorah Maria Diaz Loreto (f) Jairo Alexis Diaz Loreto (m) Bladimir Diaz (m) Alexandra Gualdron (f) Enmary Cava (f)

Dinorah Maria Diaz Loreto, Jairo Alexis Diaz Loreto, Bladimir Diaz, Miguel Diaz Loreto, Alexandra Gualdron and Enmary Cava are all family members from the town of Cagua in the State of Aragua.

They have been subjected to escalating death threats and harassment in recent months, allegedly by agents of the Aragua State Police and Amnesty International is seriously concerned for their safety.

The family members have been pressing the local authorities to carry out an exhaustive investigation into the killing of brothers Robert Diaz Loreto and Antonio Diaz Loreto and their father Octavio Ignacio Diaz, who were killed in suspicious circumstances, by agents of the Aragua State Police on 6 January.

Since the investigation into the killings began the family members have reportedly been subjected to systematic harassment and death threats. The most recent incident took place on 26 April when police agents entered the house of Miguel Angel Diaz Loreto reportedly without a warrant. They wanted to arrest him for his alleged involvement in a recent crime. As a result of the police operation, Miguel Angel was temporarily detained by the police.

Whilst also in temporary custody during the operation, Dinorah Maria Diaz was reportedly told by one of the police agents that he would kill all of her family, if they continued to pursue an investigation into the deaths of Robert, Antonio and Octavio Ignacio Diaz. Miguel Angel was also urged to stop supporting the case.

BACKGROUND INFORMATION Many Venezuelan states, including Aragua, Bolivar, Anzoatequi, Portuguesa and Falcon, have a history of extra-judicial executions carried out by the police and a failure to protect witnesses and family members of the victims. Both the Inter-American Court of Human Rights and the Inter-American Commission of Human Rights have intervened in several of these cases, requesting that local authorities and the Venezuelan state investigate these crimes and provide protection to those involved.

However, the measures requested by the Inter-American System have not, in most cases, been carried out effectively.

In December 2002, Cesar Emilio Machado was reportedly assaulted and threatened by the Municipal Police in Girardot, city of Maracay, Aragua State in order to prevent him from testifying in a trial against the Municipal Police (see UA 32/03, 29 January 2003, AMR 53/004/2003).

RECOMMENDED ACTION: Please send appeals to arrive as quickly as possible, in Spanish and English or your own language:

• expressing concern for the safety of Dinorah Maria Diaz Loreto, Jairo Alexis Diaz Loreto, Bladimir Diaz, Miguel Diaz Loreto, Alexandra Gualdron and Enmary Cava and asking the authorities to take action to guarantee their safety in accordance with their wishes;

• calling on the authorities to carry out a full, prompt and impartial investigation into the death threats and harassment experienced by these individuals, to publish the results and bring those responsible to justice;

• calling on the authorities to carry out a full, prompt and impartial investigation into the killings of Robert Diaz Loreto, Antonio Diaz Loreto and Octavio Ignacio Diaz, to publish the results and bring those responsible to justice.

APPEALS TO (Time difference = GMT - 4 hrs / BST - 5 hrs):

Attorney General

Fiscal General de la Republica Dr. Isaias Rodriguez Avenida Universidad, Esquina Pele el ojo a Misericordia, frente a Parque Carabobo, Caracas, VENEZUELA

Telegram: Fiscal General de la Republica, Caracas, Venezuela

Fax: 00 58 212 576 44 19

[Salutation: Estimado Senor Fiscal General/Dear Attorney General]

Local Governor

Gobernador de del estado Aragua Sr. Didalco Bolivar Palacio de Gobierno Maracay Estado de Aragua, VENEZUELA

Telegram: Gobernador del estado, Aragua, Maracay, Estado de Aragua, Venezuela

Fax: 00 58 243 2377002

[Salutation: Estimado Senor/Dear Sir]

Local Police

Comandante de la policia de Aragua Comisario Angel Mercado (no address available)

Telegram: Comandante de la policia de Aragua, Maracay, Estado de Aragua, Venezuela

Fax: 00 58 243 235 1220

[Salutation: Estimado Senor Comisario/Dear Sir]

Human Rights Ombudsman

Defensoria del Pueblo Dr. German Mundarain Bellas Artes comienzo Avenida Mexico frente al Ateneo de Caracas Plaza Morelos Caracas, VENEZUELA

Telegram: Defensoria del Pueblo, Caracas, Venezuela

Fax: 00 58 212 575 4467 (if a voice answers, say "tono de fax por favor")

Email: gmundarain@defensoria.gov.ve

[Salutation: Estimado Senor/Dear Sir]

PLEASE SEND COPIES OF YOUR APPEALS TO: His Excellency Senor Alfredo Toro Hardy, Embassy of Venezuela, 1 Cromwell Road, London SW7 2HR. Fax: 020 7589 8887 Email: venezlon@venezlon.demon.co.uk

AND, IF POSSIBLE, TO THE FOLLOWING:

Commission for Human Rights, Justice and Peace for the State of Aragua Comision de Derechos Humanos de Justicia y Paz del Estado Aragua Calle Negro Primero, Oeste N 98, frente al Liceo 'Valentin Espinal', Cruce con Av. Ayacucho, Maracay, Estado Aragua, VENEZUELA

Telefax: 00 58 243 233 6363 (if a voice answers, say "tono de fax por favor")

PLEASE SEND APPEALS IMMEDIATELY. Please do not send appeals after 27 June 2003.

SHOULD YOU MENTION AMNESTY INTERNATIONAL IN YOUR APPEALS? The name of Amnesty International may be used unless otherwise stated in the text above.

Letters written in a private or personal capacity may be more effective.

FAX NUMBER NOT WORKING? Officials will sometimes switch off their fax machines to stop appeals arriving? please keep trying. If you can't get through, please put your appeal in the post. If a number is unobtainable please inform the Urgent Action team.

EMAIL ADDRESS NOT WORKING? Please send a copy of the delivery error report to ua@amnesty.org.uk

RECEIVED A REPLY FROM A GOVERNMENT OFFICIAL? Please send it or a copy to the Urgent Action team. If appropriate, thank the official who has replied and ask to be kept informed about the case.