By Bradley Brooks <a href=www.upi.com>UPI Business Correspondent Published 6/5/2003 7:42 AM

RIO DE JANEIRO, Brazil, June 5 (UPI) -- Stocks were generally up across Latin America this week with local news mostly moving markets.

The biggest driver in the short to medium term for Brazil -- the region's biggest economy -- will be the fate of badly needed reforms to the country's pension, tax and legal systems.

Foreign and domestic investors are closely watching whether President Luiz Inacio Lula da Silva has the strength to power the reforms through a dizzying array of parties in Congress.

Leaders from Lula's Workers' Party in the lower house of Congress said Wednesday they had the votes needed to push the pension reform bill through the Chamber of Deputies.

According to Lula's economic team, the pension reform they're proposing would save the country nearly $20 billion over the next 30 years.

The momentum to get reforms through Congress is being aided by the mandate that voters gave Lula in his overwhelming electoral win, and the support they are still sending his way.

On Wednesday, a poll gave the leader a 78 percent personal approval rating, despite his having made little economic headway in his first five months in office.

Optimism is building on the economy as well, with foreign investors being lured back to the country.

On Tuesday, Fitch Ratings upped Brazil's debt to "positive" from "stable."

That is a remarkable transition for a country that six months ago was thought to be heading toward the world's largest sovereign default, a distinction still held by neighboring Argentina.

"The performance of President Lula's administration since taking office on January 1, 2003, has been supportive of sovereign creditworthiness and has eased one of Latin America's most marked political transitions from the center-right to a coalition dominated by the left," Fitch reported in a statement.

Meanwhile, over in Argentina, investors continue to keep tabs on new President Nestor Kirchner, whose economic ideas remain murky at best.

On the corporate front, telecommunications giant Argentina Telecom said Wednesday it will only buy back $290 million of debt, about half of what it wanted to purchase before a debt restructuring plan was frowned on by investors.

On Wednesday, Telecom Argentina's shares dropped 3.8 percent in Buenos Aires.

The company -- majority owned by Telecom Italia and France Telecom -- defaulted on some $3 billion after Argentina's peso was devalued in January 2002.

Some analysts said the paltry buyback may hurt the company's shares in coming days. But others argue investors have priced the poor buyback showing into the company's stock already.

Telecom Argentina was arguably the corporation hurt most when Argentina defaulted on its debt in December 2001, and many investors are watching the company's progress, trying to gauge how the business climate in Argentina might pan out in coming years.

Investors are also keeping a close eye on Telecom Argentina as the government decides if the sector can begin hiking prices.

Telecoms and utilities in Argentina are suffering badly, after the devaluation knocked more than 60 percent off the peso's worth, while the companies are stuck holding debt in dollars.

As for the markets, Brazil's Bovespa stock index ended last Thursday up 0.83 percent at 13,405, its third straight winning session. Investors were generally cheered by chances for having reforms pushed through Congress. Long-distance carrier Embratel rose 6.3 percent.

The index ticked up to 13,422 Friday, wrapping up a May that saw a gain of 7 percent and adding on to the nearly 20-percent rise in the Bovespa since Jan. 1. Analysts say June should be another solid month for investors, with an expected interest-rate cut likely to spark market action.

Monday brought a 1.4 percent loss to 13,229 for the index, with a retreat on Wall Street weighing. Fixed-line phone company Telemar fell 3.4 percent as the government signaled changes in pricing policies for the sector could be upcoming.

The Bovespa rose nearly 1 percent to 13,350 Tuesday. Investors were cheered by a Fitch report raising Brazil's credit rating to positive from stable. Banco do Brasil gained nearly 5 percent.

On Wednesday the index gained 2.76 percent to 13,718. Oil giant Petrobras gained 3 percent after announcing a big oil find. Aircraft maker Embraer rose more than 4 percent, and Telemar added 4.3 percent.

In Mexico, the IPC index fell 0.3 percent to 6,648. Analysts said profit-taking was seen after recent gains. Shipping company TMM fell 15 percent as the outfit faces legal woes and concerns on its debt.

Friday brought a 0.77 percent gain to 6,699 for the index. Investors tracked nice gains on Wall Street. Fixed-line phone company Telmex added 1.7 percent.

The index rose to 6,722 Monday. Broadcaster Televisa gained 1.8 percent, while America Movil, Latin America's biggest wireless company, tacked on 1.6 percent.

On Tuesday the IPC ticked up to 6,739, with blue chips leading the day. Telmex gained 1.27 percent while the country's biggest retailer, Wal-Mart de Mexico, added 0.6 percent.

The IPC rose 2.24 percent Wednesday to 6,890. Industrial group Alfa gained 2 percent, Telmex added 3.5 percent, and America Movil rose 1.76 percent.

In Argentina, the Merval stock index closed Thursday down 0.54 percent at 674.3, as investors took profits. Losses were across the board. Telecom Argentina gained 2.8 percent, though, as investors approved of its efforts on restructuring debt.

On Friday, the index gained to 678.3 as investors were mostly sidelined, playing a wait-and-see with new president Kirchner's economic game plan.

The Merval hit a five-year high Monday, rising 3.6 percent to 702.8. Utilities and banks led the way, with the latter aided by a bill to restructure the sector being sent to Congress by Kirchner. Banco Frances gained 8.4 percent.

Tuesday saw a 0.7 percent gain to 707.8, with banks again leading the way. Banco Bansud gained 4.6 percent, while Grupo Financiero Galicia -- which controls the country's largest private bank -- added 1.1 percent.

The Merval slipped 0.85 percent Wednesday to end at 701.8. Steelmaker Acindar lost 2.85 percent and Telecom Argentina dropped 3.8 percent.

In Chile, the IPSA index gained 0.44 to 1,230 last Thursday, its highest mark this year. Investors were buoyed by the soon-to-be-signed free trade deal with the United States. Fertilizer maker SQM gained 2.1 percent.

Friday brought a flat session with the IPSA gaining 1 point.

On Monday, the index added 0.9 percent to 1,242. General optimism on Chile's economic direction buoyed investors. Retailers did well, with Falabella gaining 8.6 percent and Almacenes Paris tacking on 5.4 percent.

The inevitable profit taking took its toll Tuesday, with the IPSA easing to 1,240. Falabella lost 3.7 percent.

Wednesday saw a gain of 0.56 percent to 1,247 in uneventful trade.

In Venezuela, the IBC index continued to hit historic highs as tight capital controls prompted investors to dump available cash into the stock market.

Last Thursday, the index jumped 6.66 percent to end at 12,301, a new high. Telecom giant CANTV, which makes up 40 percent of the index, rose 8.3 percent.

On Friday, the IBC rose more than 4 percent to close at 12,800. CANTV rose 1.2 percent. The index gained a staggering 48 percent in May alone, as tight restrictions on the buying of dollars sent cash into blue chips.

The market was closed Monday for a holiday. Tuesday brought profit taking a loss of 0.8 percent to 12,692.

The IBC ended Wednesday down 0.6 percent at 12,616, with profit taking again to blame.

Knight Ridder - Thursday, June 05, 2003 <a href=www.menafn.com>The Dallas Morning News By Brendan M. Case

ALTAMIRA, Mexico _ Bountiful natural gas deposits lie just a few hundred miles from this bustling port city on Mexico's Gulf Coast. But officials here are planning to import boatloads of gas from as far away as Africa.

The Federal Electricity Commission _ or CFE _ plans to hire a major energy company this year to build a liquefied natural gas terminal and re-gasification plant in Altamira.

The natural gas, or LNG, project, with a price of about $500 million, would fuel a complex of power plants in this burgeoning region some 300 miles south of Texas.

"This area is seeing a lot of economic growth, and we need more electricity," said Arnoldo Garcia Gonzalez, who oversees the CFE's operations here. "To generate electricity, we need natural gas."

The LNG rush reflects Mexico's increasingly urgent efforts to shore up its natural gas supply. State-owned oil monopoly Petroleos Mexicanos, or Pemex, has neglected gas production for years. Now, however, authorities are promoting the clean-burning fuel in power plants, factories and homes _ and demand is booming.

Altamira probably will get the first of several LNG projects south of the border. Texas companies and global competitors also are planning LNG projects in Baja California, which would supply customers in both Mexico and the United States.

Skeptics say Mexico should develop its own natural gas reserves instead of relying on imports. But investment remains limited. Pemex channels most spending to oil production, and Mexico prohibits private companies from developing oil and gas reserves.

"We're a country that could export gas and make a big industry out of exploring for and producing gas," said Hector Rangel Domene, president of the Business Coordinating Council, a leading private-sector lobbying group in Mexico City. "It's absurd that we can't do that."

Mexico has already become a juicy market for Texas gas exporters. Three months ago, Houston-based Kinder Morgan Inc. opened an $87 million cross-border pipeline. Tidelands Oil & Gas Corp., a Corpus Christi, Texas, company, sold its gas production business last year to build cross-border pipelines.

Within a few years, Mexico might also be welcoming ships laden with supercooled LNG from Nigeria, Venezuela, Malaysia or Indonesia.

"There's a growing gas market in Mexico," said Barbara Blakely, a spokeswoman for Shell Mexico, which hopes to win the LNG contract in Altamira and to build a separate plant in Baja California. "Moving gas from one part of the world to another is no longer uncommon. We do it all the time."

Mexico still is a major crude oil exporter. But the country's growing appetite for gas imports illustrates its growing industrialization.

Glass and steel companies are devouring natural gas. More important, demand for electricity is rising quickly _ and gas-fired power plants are getting the most new investment.

Recent legal changes have created a whole new business for natural gas distribution companies. Millions of consumers are now burning natural gas in their homes instead of liquid petroleum gas, the traditional fuel.

All told, natural gas imports reached nearly 650 million cubic feet per day during the first three months of the year, nearly three times what they were in 2000, according to Pemex. Domestic gas production has failed to keep pace with demand.

"Productive capacity is not increasing, while demand is rising quickly," said Alejandro Gonzalez, an analyst with Cambridge Energy Research Associates, in Cambridge, Mass. "The United States is in the same situation."

Pemex is trying to lure private companies to help develop gas reserves in northern Mexico's Burgos basin, a project that would cost at least $6 billion. But that plan faces political opposition from critics who say it violates Mexico's strict limits on private energy investment.

So the search is on for other gas sources, including LNG. Within a few years, LNG could conceivably account for more than 1 billion cubic feet per day _ about as much as Pemex hopes private companies would extract from Burgos.

"If you start a new program to drill natural gas, how much is it going to cost you? Ten billion dollars?" asked Gonzalez. "If you build an LNG terminal, it will cost you half a billion dollars. And you'll get the gas as soon as the terminal is finished."

Many LNG projects face stiff political opposition.

In Baja California, business leaders and grassroots activists have warned that LNG terminals would create eyesores and security risks in areas that depend on tourism. Opponents fret that such terminals might prove tempting targets for terrorists.

Mexican officials say LNG plants would be built with an eye to security concerns. Blakely, the Shell spokeswoman, says her company has never experienced a major accident with LNG.

Other critics worry that energy companies will turn Mexico into a huge LNG depot for the United States, selling gas to U.S. customers while taking advantage of weaker environmental enforcement south of the border.

"Mexico could turn into a big LNG platform for the United States," said Victor Rodriguez-Padilla, an energy expert who advises the opposition Institutional Revolutionary Party. "One of the risks is that our environmental standards would be ignored."

Energy companies say they still hope to build LNG projects in Baja California, with plans to sell gas to customers on both sides of the border. Backers include the Royal Dutch/Shell Group; Houston-based ConocoPhillips; Houston-based Marathon Oil Corp., ChevronTexaco Corp., which is based in San Ramon, Calif.; and Sempra Energy, which hails from San Diego.

Analysts say Baja California could probably only support one or two such projects, adding that it's hard to tell which company is winning the race to obtain all necessary permits.

In May, however, Mexican authorities issued Baja California's first LNG permit to Marathon Oil. Marathon executives envision a $1.5 billion "Tijuana Regional Energy Center," which would include LNG facilities, a power plant and a desalination plant to provide fresh water.

"The Tijuana area is seeing tremendous growth," said Paul Weeditz, a spokesman for Marathon. "Without these basic infrastructure elements, developing the economy is tough to achieve."

The Altamira LNG project could be the first to move forward.

Unlike the Baja projects, which would seek their own customers, the Altamira terminal would sell its gas to the Federal Electricity Commission, the CFE. The CFE would burn the gas in several power plants providing much-needed electricity to the national grid.

Companies such as Mexico's Petrocel-Temex, Germany's BASF AG and U.S.-based General Electric Co. have major plastics and petrochemical plants in Altamira. Local power plants also can transmit power to customers in Monterrey, the northern business capital, and elsewhere in Mexico.

Altamira's LNG plant would need to supply up to 500 million cubic feet of gas per day. The price would be tied to Henry Hub benchmark prices on the New York Mercantile Exchange. At current prices, which are historically high, 500 million cubic feet of gas is worth nearly $3 million.

CFE officials originally had said they would announce the winner in April. Now they say a winner could be announced this summer. Officials said in January that companies interested in the project included Shell, BP, Spain's Iberdrola and other major competitors.

Would-be suppliers would have to show that the total price Mexico pays for LNG would be less than what it would pay to import gas through a pipeline. The CFE would agree to buy the gas for 15 years.

"This area is going to be one of the most important power generation areas in the country," said Garcia, the local CFE director in the Tampico-Altamira area. "With all the new development in gas and electricity, we'll be able to satisfy demand."

<a href=www.menafn.com>MENA-FM.com - Khaleej Times - 05/06/2003

ABU DHABI - Ministers from member states of the Organisation of Petroleum Exporting Countries will hold the annual meeting of the Opec Fund in Abu Dhabi next week. "This will be the first time the Opec Fund meeting is hosted by the UAE and this region," a spokesman for the UAE ministry of finance and industry said.

Ministers from the UAE, Saudi Arabia, Qatar, Kuwait, Venezuela, Algeria, Libya, Indonesia, Iran and Nigeria will be present for the June 11 meeting, which will discuss, among other things, funding new projects. A representative from Iraq is likely to participate. With a capital of $3.435 billion, the Opec Fund granted 953 loans totaling $ 5.146 billion until the end of last year.

Meanwhile, a Qatari oil source said in Bahrain that Opec won't change its production level of 25.4 million barrels a day, which took effect June 1, when it meets next week in Qatar because Opec basket price is within its set range and Iraq situation is still unclear. "There's no point in changing production now... there's no talk about increasing or cutting production," he said. Opec is scheduled to hold an extraordinary meeting in Doha on June 11 to set its production policy and to review the situation in Iraq.

Posted on Thu, Jun. 05, 2003

Dublin-based Sybase Inc. (SY) plans to invest $25 million to bring wireless fidelity, or Wi-Fi, applications to businesses.

The company said it will launch a network of Wi-Fi competency centers, including one at the Research and Technology Park at the University of Waterloo in Ontario, a technology-research institution.

The software provider will also collaborate with customers and partners to accelerate mobile-application development and deliver database-powered business services to mobile devices.

Natural gas

ConocoPhillips, the third-largest U.S. oil company, bought 40 percent of a Venezuelan natural gas tract from ChevronTexaco Corp. (CVX), ChevronTexaco said in a release.

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 spokeswoman Monica Davila in Caracas would not disclose the terms of the ConocoPhillips purchase.

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's state oil company, Petroleos de Venezuela SA, retained the right to acquire as much as 35 percent of the project, the release said.

Venezuela is counting on natural gas from Deltana to reduce its dependence on revenue from oil exports. The Deltana Platform is divided into five blocks and comprises 27,000 square kilometers. Venezuela estimates the area holds up to 40 trillion cubic feet of natural gas.

Natural gas produced at Block 2 will be processed into liquefied natural gas and exported to the United States, the release said.

Merger

Shareholders of Larscom Inc. and Newark's Vina Technologies Inc. (VINA) approved the agreement for the two companies to merge.

Biotechnology

Toronto Medical Laboratories has acquired technology developed by Fremont-based Ciphergen Biosystems Inc. (CIPH) to identify new protein characteristics that can be converted into commercial diagnostic tests. Financial and other terms were not disclosed.

Subsidiaries of Baxter International Inc. and Concord-based Cerus Corp. (CERS) have reached agreement with the U.S. Food and Drug Administration on steps for regulatory approval for their system that could potentially protect patients by reducing the risk of transfusion-transmitted diseases. The system is designed to go a step beyond current blood-safety measures. The two companies said they expect to complete the additional steps in the next 15 to 18 months, with regulatory submission to follow shortly thereafter.

Trading

Emeryville-based Ask Jeeves Inc. (ASKJ) closed its sale of $100 million in convertible subordinated notes.

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 fiscal 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.

Reuters, 06.05.03, 5:52 AM ET By Tom Ashby

LONDON, June 5 (Reuters) - OPEC may pull back from a heavily signalled output cut at a meeting next week because prices have stayed higher than ministers expected, but many oil market analysts still see the cartel tightening its belt soon.

Prices have pushed up towards the upper end of OPEC's target range of $22-$28 per barrel over the past few weeks, but analysts see OPEC oil flows sparking a price-busting stock-build in the third quarter unless it cuts output soon.

OPEC ministers said in April they were ready to trim their output ceiling of 25.4 million barrels per day (bpd) by up to two million bpd at the June 11 meeting in Qatar to make room for Iraq, but the rally has dampened the likelikood.

"Our numbers point to a needed cut of 1.4 million bpd in the third quarter, but prices being where they are, we don't think they will do anything," said Leo Drollas at London's Centre for Global Energy Studies.

Indonesia and Venezuela have both said this week that OPEC need not cut while its export basket remains towards the top end of the target range of $22-$28 per barrel. The basket stood at $26.72 on Wednesday.

Tor Kartevold, special adviser on trading strategy to Norway's Statoil <STL.OL>, said this could be too short-term an outlook. Including a modest stockbuild of 600,000 bpd to 1.0 million bpd in the third quarter, Kartevold pegged the demand for OPEC crude excluding Iraq at 24-24.5 million. OPEC output, excluding Iraq, stood at 26.6 million bpd in May, according to a monthly Reuters survey.

"OPEC needs to cut by about 1.5 million barrels per day to avoid an excessive stock build in the third quarter," Kartevold said, forecasting a recovery of Iraqi output to 1.5 million bpd in the third quarter, versus current output at half that level. If prices stay where they are, Drollas said OPEC might stay its hand on June 11, and call an additional meeting in July when Iraqi output is more certain.

However, not all analysts shared this view.

Mike Rothman at Merrill Lynch expects demand on OPEC oil to be much stronger in the latter half of the year, partly to replenish low inventories.

"OPEC quotas will need to be left as is, with the 25.4 million bpd ceiling basically meeting market requirements for the third quarter period, provided Iraq does return to the market on the order of 1.5 to 2.0 million bpd," he said.

Iraq announced its first post-war crude oil exports on Thursday, and Iraq's de facto oil minister, Thamir Ghadhban, expects to reach a production of 1.5 million bpd by mid-June. Heavy looting and suspected sabotage at Iraqi oilfields has delayed the recovery of the industry.