<a href=www.nzherald.co.nz>New Zeland Herald05.06.2003 8.30 am

NEW YORK - World oil prices dipped on Wednesday (New York time) as an increase in petroleum inventories in the United States, the world's largest energy consumer, eased fears of a summer supply crunch.

Prices were also pressured by comments from Opec member Indonesia that the producer cartel would not need to further curtail supplies at a meeting next week to counter an expected resumption in exports from Iraq.

US light crude oil futures dropped 62 cents to US$30.05 a barrel, while internationally traded London Brent crude dipped 47 cents to US$26.80 a barrel.

US crude oil supplies jumped 2.8 million barrels in the week ended May 30, with petrol supplies up 2.3 million barrels, the US Energy Information Administration (EIA) said on Wednesday.

The increase in petroleum supplies in the US, which comprises about a quarter of the world oil market, comes at a critical time of the year when petrol demand typically surges due to warmer weather and heavy vacation planning.

Despite the increase in stock levels, oil and petrol supplies in the US remain below year-ago levels in the aftermath of a series of supply interruptions over the winter from Venezuela, Nigeria and Iraq.

Adding selling interest to world oil markets, Indonesian Energy Minister Purnomo Yusgiantoro said Wednesday Opec did not need to consider cuts in oil output while prices were inside Opec's US$22-US$28 per barrel band.

"Our interest is the price stays above US$22 per barrel. If prices stay above that, then there is no need for Opec to cut quotas," Yusgiantoro said.

CONTINUED WEAKENING

Some Opec ministers had hinted that a cut might be on the cards at next week's meeting in Qatar as a resumption in Iraqi oil exports looms, but prices have risen strongly toward the upper end of Opec's target range.

Opec's reference export price stood at US$27.09 on Tuesday.

"Now that a consensus appears to be emerging within Opec that a production cut at its meeting next week is not necessary, we expect crude oil prices to continue weakening over the next few days," Barclays Capital Research said in a report.

War-torn Iraq has suspended exports since the US-led war began in March and the authorities expect the first tankers to lift crude from storage tanks in the middle of June.

Previous targets for resuming exports have been put back because of unexpected problems with looting and sabotage.

The head of Iraq's southern oil company, which produced most of Iraq's crude before the war, said on Wednesday output there was just a fraction of pre-war levels because of the security problems.

Total Iraqi output now stands at 750,000 barrels per day, about a quarter of pre-war levels, although Iraqi authorities in Baghdad expect it to double by the middle of the month.

Paul Stevens, professor of petroleum policy at Britain's University of Dundee said the looting and sabotage indicated that current forecasts for Iraqi exports were far too high.

"People are grossly underestimating the time it will take to restore pre-war capacity in Iraq," he said. "The US and Britain don't have the troops on the ground or the administration to do it."

Posted on Wed, Jun. 04, 2003 CHRISTOPHER SCINTA Associated Press

WASHINGTON - DirecTV Latin America LLC said Wednesday it has received bankruptcy court approval of a $300 million credit line from majority owner Hughes Electronics Corp.

The debtor-in-possession loan, approved by the U.S. Bankruptcy Court in Wilmington, Del., is meant to finance the company until it emerges from Chapter 11 bankruptcy.

Some minor changes were made to the agreement that clarify and modify Hughes' rights, should DirecTV Latin America default on the loan, said Jannice Reyes, spokeswoman for the satellite broadcaster. Hughes of El Segundo, Calif., made the changes to address concerns from its unsecured creditors committee.

DirecTV Latin America, based in Fort Lauderdale, Fla., filed for Chapter 11 in March, and soon after, the court gave interim approval for the company to borrow $30 million on the Hughes credit line, pending the final approval. DirecTV Latin America said in its request for the interim loan that without the financing, it would be forced to cease operations.

The satellite-television company already owes Hughes about $1.35 billion. In return for the DIP loan, Hughes received first-priority liens and security interests in all of DirecTV Latin America's property.

DirecTV Latin America said in previous court filings that it expects to draw $258.8 million on the $300 million loan agreement until February 2004. The company said it expects negative net cash flow of $259.4 million for the same period.

General Motors Corp. agreed to sell its stake in Hughes to News Corp., with News Corp. gaining a controlling stake in Hughes and consequently in DirecTV Latin America.

When it filed for bankruptcy, DirecTV Latin America listed assets of $600 million and liabilities of $1.6 billion as of December. The company attributed its Chapter 11 filing to economic and political crises in Argentina, Venezuela and Brazil.

Reuters, 06.04.03, 3:48 PM ET

CARACAS, Venezuela (Reuters) - The Organization of Petroleum Exporting Countries (OPEC) could keep oil production quotas unchanged when the cartel holds its next meeting on June 11, a Venezuelan energy official said on Wednesday.

Luis Vierma, Venezuela's Vice Minister of Hydrocarbons, said that while OPEC was ready to act to keep prices within its preferred price band of $22 to $28 a barrel during the Qatar meeting next week, it may not need to alter quotas to do so. "OPEC may not see the need to turn to a policy of cutting (output), as prices have stayed within the band, even WTI (U.S. West Texas Intermediate crude), so perhaps it will not be necessary," Vierma was quoted as saying.

U.S. light crude oil futures dropped 62 cents to $30.05 a barrel on Wednesday, following U.S. data which showed a build in petroleum inventories.

OPEC agreed in April to cut oil production by 2 million barrels per day (bpd) beginning June 1, after several cartel members earlier in the year increased output ahead of the invasion of Iraq.

Venezuela's Energy Minister Rafael Ramirez said last week OPEC could cut output by up to one million bpd should the producer group decide to reduce officials quotas to support prices.

Vierma said that Venezuela would also reduce output if the producer group decided to cut quotas, adding that Venezuela was already oil production was currently 100,000 bpd below its official quota.

The world's No. 5 oil producer has an official OPEC quota of 2.923 million bpd. PDVSA President and former OPEC Secretary General Ali Rodriguez and government officials have pegged output closer to 3.1 million bpd.

ContraCostaTimes.comPosted on Wed, Jun. 04, 2003

ConocoPhillips, the third-largest U.S. oil company, bought 40 percent of a Venezuelan natural gas tract from San Ramon-based ChevronTexaco Corp. (CVX), www.chevrontexaco.com, ChevronTexaco said.

Terms of the purchase were not disclosed. ChevronTexaco, the second-largest U.S. oil company, retained 60 percent of Block 2 in Venezuela's offshore Deltana Platform tract, South America's largest natural gas reserve. The tract is located between Venezuela and Trinidad and Tobago.

ChevronTexaco, which won development rights to Block 2 in February, said in April it plans to spend as much as $1 billion to develop the tract.

Venezuela is counting on natural gas from Deltana to reduce its dependence on revenue from oil exports. Venezuela estimates the area holds up to $40 trillion cubic feet of natural gas.

Appointments

Shareholders of Pleasanton's Lipid Sciences Inc. (LIPD) re-elected two directors, William Pope, president and CEO of SunChase Holdings and president and a director of Sun NMA Inc., and S. Lewis Meyer, president and CEO of Lipid Sciences. The remaining four directors were not eligible for re-election. The board of directors also appointed Deloitte & Touche LLP to continue as the company's independent auditors for the 2003 year.

Compiled by Ellen Lee from company and wire reports. A new column is posted weekdays at the Business site on www.contracostatimes.com at 12:30 p.m. Got East Bay business news? Reach Lee at 925-952-2614 or at elee@cctimes.com.

<a href=www.vheadline.com>Venezuela's Electronic News Posted: Wednesday, June 04, 2003 By: David Coleman

In a press release issued in Caracas this morning, ChevronTexaco and ConocoPhillips have announced a partnership in the exploration and development of Block 2 in Venezuela's offshore Plataforma Deltana was awarded to ChevronTexaco in mid-February by the Ministry of Energy & Mines (MEM).

ConocoPhillips is to acquire 40% interest while ChevronTexaco will hold 60% and remains the operator, both working in collaboration with Petroleos de Venezuela (PDVSA) which retains the right to acquire up to 35% at the time of a declaration of commerciality. Natural gas from the fields will be processed into liquefied natural gas (LNG) for export to the United States.

George Kirkland, president of ChevronTexaco Overseas Petroleum says “this agreement combines the already considerable experience in Venezuela of two world-class companies ... the project is part of ChevronTexaco’s strategic plans to commercialize its existing natural gas resource base and enable the creation and development of new natural gas growth opportunities worldwide.”

ChevronTexaco and ConocoPhillips are already involved with major projects in the Orinoco Belt where ChevronTexaco operates the Boscan and LL-652 fields in the west of the country while ConocoPhillips operates on behalf of partners in the Gulf of Paria West.

Ali Moshiri, managing director of ChevronTexaco Upstream Latin America says “ConocoPhillips was the logical choice for us as partner in Block 2 ... their existing reserves in the vicinity, extensive LNG experience worldwide and the strong position of both companies in the US natural gas market make us a very powerful team.”