Adamant: Hardest metal
Saturday, July 5, 2003

Letter to the editor: President Chavez Is Committed to Democracy

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.

Embassy of Venezuela

Sharp upward revision in world oil stocks briefly pushes July oil futures below $30

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.”

Iraqi oil production will have an impact on the Venezuelan economy

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.

US Energy Department certifies Venezuelan reformulated gasoline

Venezuela's Electronic News
Posted: Monday, June 23, 2003
By: 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."

Mexico's Telmex, Cemex and Brazil's Embraer Fall: Latin Stocks

June 23 (Bloomberg) -- Mexico's benchmark stock index is heading toward its largest one-day drop in a month, following equity markets in the U.S., the buyer of almost 90 percent of the Latin American country's exports. Telefonos de Mexico SA, the country's biggest phone company, led declines.

The Mexico City-based Bolsa index fell 77.59, or 1.1 percent, to 7003.10 by 1:43 p.m. New York time, its fourth day of declines. Brazil's Bovespa index of the most-traded stocks on the Sao Paulo stock exchange fell 1.3 percent to 12,966.94, a fourth day of decline.

``Telmex is linked to the U.S. markets,'' said Gerardo Lozoya who manages $80 million in Latin America stocks for Investra Consultores in Monterrey, Mexico.

The Standard & Poor's 500 Index fell 15.58, or 1.6 percent, to 980.12, the third drop in four days. The Dow Jones Industrial Average declined 1.5 percent to 9064.92 and the Nasdaq Composite Index shed 2.1 percent, to 1609.73.

In other markets, stocks in Argentina, Chile and Peru fell, while in Venezuela they rose. Markets in Colombia are closed for the Corpus Christi holiday.

The following stocks are having significant gains or losses in Latin American markets today. Symbols are in parentheses after the company name. In Brazil the preferred share is usually the company's most-traded class of stock.


Telmex (TELMEXL MM) fell 42 centavos, or 2.5 percent, to 16.47 pesos, its lowest level in two weeks.

Cemex SA (CEMEXCP MM), the world's third-largest cement maker, fell 88 centavos, or 1.9 percent, to 46.21 pesos. The company said last week its global sales in the second quarter likely rose 6.3 percent compared with the same period of last year though sales in the U.S. fell.

Grupo Iusacell SA (CELV MM), Mexico's third-largest cellular phone provider, surged 8 centavos, or 30 percent, to 36 centavos. The stock has more than doubled in the last four days. Analysts say some minority shareholders expect Ricardo Salinas Pliego, who bought the controlling stake in Iusacell held by Verizon Communications Inc. and Vodafone Group Plc, may negotiate a reduction on the company's $800 million debt. ``Isuacell's stock is 100 percent speculative,'' said Lozoya.

Grupo Mexico SA (GMEXICOB MM), the world's third biggest copper producer, fell 25 centavos, or 1.6 percent, to 15.15 pesos as the price of copper for three-month delivery fell $15, or 0.9 percent, to $1,690 a metric ton on the London Metal Exchange. The price of copper lost 1.7 percent in the last three days.

Grupo Modelo SA (GMODELOC MM), Mexico's largest beer maker, fell 9 centavos, or 0.4 percent, to 24.01 pesos. Reforma newspaper reported the company plans to build a $1.5 billion plant in western Colima state, and to spend $350 million to boost capacity at two existing plants.


Eletropaulo Metropolitana SA (ELPL4 BS), Latin America's largest power distributor, fell 62 centavos, or 2.3 percent, to 26.19 reais. Gustavo Gattass, an analyst with UBS Warburg SA, cut his recommendation on the shares to reduce'' frombuy'' and lowered his target price for the stock to 30 reais from 45 reais.

Empresa Brasileira de Aeronautica SA (EMBR4 BS), the world's fourth-largest aircraft maker, fell 29 centavos, or 2.1 percent, to 13.61 reais, on reports that one of its clients, Swiss International Air Lines Ltd., may cut 28 percent of its intercontinental fleet as part of a plan to reduce costs.

Petroleo Brasileiro SA (PETR4 BS), the state-controlled oil company known as Petrobras, fell 85 centavos, or 1.7 percent, to 50.25 reais. The Rio de Janeiro-based company said it agreed to pay $59 million of Houston-based Halliburton Co.'s claims over delays in building offshore oil production platforms. Halliburton, the world's second-largest oilfield-services company, said last week second-quarter profit will plunge because of the delays, and that it's seeking $375 million in claims from Petrobras.

Tele Norte Leste Participacoes SA (TNLP4 BS), the country's largest telephone company, fell 53 centavos, or 1.6 percent, to 33.62 reais. The telecommunications regulator is to release this week rate increases for fixed-line phone calls.


Grupo Financiero Galicia SA (GGAL AR), the country's second- largest banking group, fell 5 centavos, or 3.7 percent, to 1.29 pesos. Galicia fell after reaching last week its highest price since July 2001. ``This drop is a normal reaction after a big gain,'' said Santiago Caronni, a trader at Puente Hermanos Sociedad de Bolsa in Buenos Aires.

Solvay Indupa SAIC (INDU AR), a company that produces PVC, rose 15 centavos, or 6.9 percent, to 2.32 pesos, the biggest gain in five weeks. ``Solvay is related to the construction industry, which rose 36.3 percent in the first quarter from the same period last year,'' said Caronni.

Telecom Argentina Stet-France Telecom SA (TECO2 AR) fell 25 centavos, or 5.9 percent, to 4 pesos after gaining 4.2 percent on Friday.


Cia. de Minas Buenaventura SA (CMB/C PE), Peru's biggest gold and silver miner, fell 7 centimos, or 1.3 percent, to 52 soles. Shares fell as the price of gold for three-month delivery dropped 1.3 percent to $352.10 an ounce on the Comex division of the New York Mercantile Exchange.

Credicorp Ltd. (BAP PE), Peru's biggest financial holding company, rose 11 cents, or 1.1 percent, to $9.91, gaining for a second day. Credicorp owns Peru's biggest bank Banco de Credito del Peru SA.

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