sabcnews.com, June 24, 2003, 09:15

Outgunned by criminals, dodging bullets, stones and fireworks at protests, Caracas's Metropolitan Police are under fire from another enemy: the government of Hugo Chavez, the Venezuelan President.

Chavez, a progressive, is threatening to take over control of the 9 000-strong autonomous force for the second time in seven months after officers used tear gas and shotgun pellets on June 13 to disperse a violent stone-throwing mob of Chavez supporters.

The populist president regularly pillories the city police force, run by anti-Chavez mayor Alfredo Pena and known by its Spanish initials "PM", as a murderous, subversive band of coup plotters bent on trying to topple him.

State 'has monopoly of force' Other regional units controlled by opposition state governors, who under the constitution can run their own police forces, are also viewed by Chavez as hostile. "If I have to take over these police again, I will ... We, as the state, hold the monopoly of force," Chavez said recently.

Venezuela's police and security forces have been sucked into the political maelstrom over Chavez's rule that has kept the world's No. 5 oil exporter in turmoil for over a year. Opponents of the soldier turned politician, first elected in 1998, have attempted a coup, a gruelling two-month strike and waves of street protests to try to unseat him. They accuse him of amassing dictatorial powers in a bid to install a Cuban-style government.

In this topsy-turvy world of polarised politics, Venezuela's police and security forces often appear to operate as rival armies instead of allies in preserving law and order.

Out of control Chavez ordered the Metropolitan Police force to submit to military control last November. He accused Pena of running the force as a private army and blamed city officers for shooting dead several Chavez supporters during protests.

Opponents condemned this militarisation of the force as a move by the president to neutralise hostile armed groups in the wake of an April 2002 coup that briefly toppled him.

The Supreme Court overturned the takeover five weeks later but the Caracas force is still "policed" by army detachments embedded in their stations. Police officers say their vehicles and heavy weapons have been confiscated, leaving them with only revolvers to confront heavily armed criminals.

Government 'going too far' "I think the initial move by the government may have been justified because the Metropolitan Police were a bit out of control and had weapons like heavy machine guns and even rocket launchers. But now the government may be going too far," one European diplomat observed.

With the rival security forces all nervously eyeing each other instead of fighting lawbreakers, crime has increased by 30% in Caracas, already one of Latin America's most violent cities. Killings, kidnappings and robberies are rife. - Reuters

The Washington Post Subscribe to The Post Tuesday, June 24, 2003; Page A20

The June 12 editorial "A Vote on Mr. Chavez" said that Venezuelan President Hugo Chavez "continues to behave as if he has no intention of giving up his attempt to push through a quasi-totalitarian, quasi-socialist 'revolution,' regardless of what his people may want."

Mr. Chavez has no trepidation about allowing the people to decide through a recall referendum who their president should be. He has never tried to restrict the conditions of the referendum, and he has followed the guidelines for it outlined in Venezuela's constitution.

The Post mentioned various maneuvers to illustrate Mr. Chavez's reluctance to help those who oppose his government gather the signatures they need to trigger a recall referendum. But if the opposition fails to attract the number of signatures the constitution requires, it won't be the fault of the constitution -- or of Mr. Chavez. Implying that he should do more to help the opposition is like asking California Gov. Gray Davis to help Republicans with their recall petition in that state.

The Chavez administration is committed to democracy in Venezuela. Many factors are involved in our country's turmoil; The Post's simplistic and unreasoned argument does a disservice to its readership and to democracy itself.

BERNARDO ALVAREZ HERRERA Ambassador Embassy of Venezuela

Petroleum News North America's Source for Oil and Gas News June 2003 Vol. 8, No. 25 Week of June 22, 2003 Gary Park, Petroleum News Calgary correspondent

The International Energy Agency rattled world oil markets June 13 by pumping another 78.8 million barrels into its global inventory, raising the total to 2.44 billion barrels.

The findings, based on high U.S. crude runs, briefly pushed July contracts on the New York Mercantile Exchange below $30 a barrel.

But the Paris-based agency said commercial stocks in the 30 industrialized member countries belonging to the Organization for Economic Cooperation and Development were still close to five-year lows entering May.

The IEA said its revisions “do little to ease the tight U.S. gasoline situation heading into the peak summer driving season.

“The message remains the same: OECD commercial stocks are low and need to build in advance of peak demand,” the report said.

World oil demand for 2003 remains unchanged at 77.9 million barrels per day, but economic recovery should add another 1 million barrels per day later in the year, the IEA said.

On the supply side, the IEA reported that OPEC output in May was 26.43 million barrels per day, with Iraq, Nigeria and Venezuela — all hit by disruptions — boosting production by 150,000 to 200,000 barrels per day.

It said Iraqi volumes are now at 750,000 barrels per day, but projections of a doubling by mid-year are “overly ambitious.”

Estimates of non-OPEC supplies for the third quarter are 50.3 million barrels per day.

Matthew Simmons, president of investment bank Simmons & Co., told economists in Prague this month that OPEC holds “all the future supply cards,” although Mideast growth may be limited.

He also questioned assumptions that non-conventional oil will meet world demand for decades, noting that heavy oil needs “remarkable amounts of energy to convert into usable energy.”

<a href=www.vheadline.com>Venezuela's Electronic News Posted: Monday, June 23, 2003 By: Jose Gabriel Angarita

VenAmCham economist Jose Gabriel Angarita writes: The price of OPEC oil went down again last week, to an average of $26.17 per barrel, compared to $27.54 per barrel the week before, according to figures published in El Universal today. The source is the OPEC Secretariat in Vienna.

The oil cartel is trying to keep prices in a band ranging from $22-28 per barrel, but expects a major decline when Iraq fully recovers its production capacity and expands its exports. Information has emerged that, following the recent military conflict, Iraq resumed oil exports through the port of Ceyhan this Sunday, putting an end to a two-month interruption due to the war.

Iraq, the country with the world's second-largest oil reserves, has signed contracts with companies from the United States, Spain, France, Turkey, and Italy to market its crude, meaning that oil exports will be gradually increasing. That will raise world oil supply and put downward pressure on prices. However, current Iraqi production stands at 750,000 barrels per day, the target for the end of June is 1 million barrels per day, and 2 million barrels per day should be flowing by the end of the year, though analysts view the latter figure as over-optimistic.

There is no question that when Iraqi production takes its place on the international market, it will have an impact on the Venezuelan economy, since income from crude oil exports, the leading source of foreign exchange for the Venezuelan economy, will go down. In that case, the National Treasury will find itself in an even more difficult position given the large number of internal and external spending commitments it must honor, as a result of the policy of massive public borrowing in the last five years.

<a href=www.vheadline.com>Venezuela's Electronic News Posted: Monday, June 23, 2003 By: VHeadline.com Reporters

State news agency VENPRES reports that a US Energy Department Commission has certified the dispatch to New York of 316,000 barrels of reformulated gasoline, giving parallel authorization and product quality approval to the Venezuelan product alongside production from US-based refineries.  The news was announced by Ivan Hernandez, director general of the Paraguana Refinery complex in western Falcon State.

"In effect the US certification conforms to international ecological norms on the reduction of contaminating particle emissions ... the quality of our Venezuelan energy products has been put to test without any shred of proof ... there has been much made of the opposition stoppage to claim that our products lack rudimentary quality standards, but in the presence of representatives of prestigious international organizations we have been able to demonstrate the exact opposite."

"Versions of how US operators have been worried about the quality of our products are pure rumors which lack any form of substantiation ... the US Department of Energy has been able to certify the quality and operability of the Venezuelan petroleum industry to the extent that they have authorized the export of not just reformulated gasoline but a whole range of other products," Hernandez told reporters.

The 316,000 barrels cargo left the Amuay-Cardon refinery in Falcon State today, Monday, on the Espirit Express bound for New York ... the first of five similar cargoes scheduled for July delivery.  "This is an historical  achievement," Hernandez says.  "After the sabotage of our petroleum industry which caused so much damage and losses to the country, we have been able to reestablish the production of green gasoline (CPR) for the eastern seaboard of the United States in full accordance with the US Clean Air Act aimed at progressively reducing poisonous particle emissions such as carbon monoxide which is seen as one of the precursors to smog."

Hernandez rejects opposition Venezuelan media claims that it has been impossible for PDVSA to produce CRP ... "all production and refinery units in the largest petroleum complex in Latin America are in perfect working order and at required levels of operation ... we are now processing 730,000 barrels of crude oil per day ... the only thing we had been previously been unable to get operative was a TAME oxygenation unit, but that is now up and running and we are now able to maintain operational supplies to our commercial clients in the United States."

The Amuay-Cardon refinery's CPR maximum capacity is reckoned to be 940 barrels per day ... "but we haven't needed to push production so high since 730,000 bpd has been our normal production over the last couple of years with 100,000 bpd of leaded for domestic consumption in Venezuela and 45,000 bpd unleaded."