Washington Times
By Bradley Brooks
UPI Business Correspondent
RIO DE JANEIRO, Brazil, April 25 (UPI) -- Venezuela's President Hugo Chavez -- at the helm of the world's fifth-largest oil exporting country -- said Friday during a visit to Brazil that the United States should keep its hands off Iraqi oil.
"The Iraqi oil should be left for Iraq, it should be administered by Iraqis, and I can't conceive of there being a new colony, that would begin in the 21st century a new era of colonialism, which would set us back 500 years," he told reporters.
"What is happening in Iraq is lamentable, we agree with (Brazilian President) Lula and the Brazilian government, and from the first moment we rejected this war," Chavez said.
Chavez -- making his third visit to Brazil since the presidential inauguration of fellow leftist Luiz Inacio Lula da Silva -- is set to sign an agreement that will strengthen ties between the two countries' state-run oil companies.
But Chavez also hopes some of the political magic of Lula -- the most popular leader in Latin America -- rubs off on him.
Late Thursday, the secretary general of the Organization of American States told reporters in Caracas that talks had stalled between Venezuela's government and the opposition demanding the resignation of Chavez.
Cesar Gaviria, the OAS official, said that an April 11 agreement between the two sides had fallen through.
Gaviria said, without elaborating, that the talks that began eight months ago had ended. He didn't give any indication as to when they might begin.
Opposition protesters and strikers have been demanding Chavez exit the presidency for well over one year.
The tension culminated in the temporary overthrow of Chavez last April, followed by months of crippling nationwide strikes that were called off in February.
Opponents are seeking a referendum to be held after August on whether Chavez should remain in his post.
Political analysts say that despite their shared history in the leftist movement of Latin America, Lula is unlikely to take a high-profile role in helping Chavez gain international political support.
Lula has taken a decidedly centrist track since his election, pleasing Wall Street with his business-friendly and austere economic moves.
Lula has also dismissed Chavez's tactics as a leader, saying he is working to unite Brazil, rather than ignite a situation that pits one half of the country against the other, as in the case of Venezuela.
To underscore that, Brazilian officials told reporters that Friday's meetings were meant to be purely about business, and whether Brazil's national development bank will lend upward of $1 billion to Venezuela for the purchase of Brazilian-made products.
"This meeting is a significant leap forward in the commercial and political relations between both nations," said Wladimir Villegas, Venezuela's ambassador to Brazil.
Brushing off criticism that the loan could be construed as a sign of strong political support for Chavez, Brazilian officials said the deal was intended to strengthen overall bilateral ties, not those between individual leaders.
Lula and Chavez will also sign Friday an agreement that will further entrench the business dealings between PDVSA and its Brazilian counterpart, Petrobras. Neither company would comment on details of the agreement.
But reports in the Brazilian press indicate a promise by Brazil to buy more goods from PDVSA and an agreement to let the Venezuelan company participate in a $2 billion refinery project in northeastern Brazil are likely included.
The refinery, which would be constructed over the next three years in the state of Pernambuco, would eventually produce 220,000 barrels of oil per day, industry officials say.
Whatever increased business relations Chavez can score on his trip to Brazil are sorely needed, analysts say.
Last year, amid political upheaval, Venezuela's economy shrank by 8.9 percent. There was inflation of 32 percent last year, and the unemployment rate hovered near 18 percent.
Additionally, Venezuela's currency dropped steeply until the government in late January halted foreign exchange sales. Chavez also ordered capital controls.
Most economists say Venezuela's economy is likely to shrink by more than 10 percent this year.
Meanwhile on Friday, PDVSA officials announced in Venezuela that the company will pay some $700 million a month in taxes in the second quarter, easing concerns that the government was going to default on its foreign debt.
The increase in receipts indicates that PDVSA -- which pays about half of the taxes Venezuela takes in -- is beginning to collect overdue payments owed it since the company restarted exports in January after the two-month general strike.
AMERICA WATCH: Globalizing the Bolivarian Revolution--Hugo Chávez’s Proposal for Our América
By Alex Contreras Baspineiro
Special to The Narco News Bulletin
April 24, 2003
"“The life of the nation is at stake"
-Hugo Chávez, President of the Bolivarian Republic of Venezuela
Hugo Chávez Frías, president of the Bolivarian Republic of Venezuela, is a patriotic soldier, a tireless worker, uniquely charismatic, a friend of the poor, an enemy of imperialism, and a model revolutionary leader.
Alex Contreras with President Chávez in Miraflores: During the course of the World Gathering of Solidarity with the Bolivarian Revolution, which ran from April 10 to 13 in Caracas, I had two opportunities to speak with President Chávez – first, at a lunch in Miraflores Palace for about 30 intellectuals and social activists from around the world; and second, at a private dinner with three fellow Latin American leaders.
People close to the president describe him as a man of boundless energy and an incredible work ethic: a natural leader and an uncompromising individual.
When Chávez arrives at the Government Palace, he makes quite an entrance. He responds to a salute from his security guards with a slap on the back and friendly hello. "How you doing?" he asks them. They chat and laugh all the way to his office, as Chávez gets the latest news and his schedule for the day. Colonel Jorge Barrientos Fernández, a man very close to the president, confessed that Chávez is like a river: “the more you throw at him, the higher he rises.”
A Government of the People
Just like the president, people from all sectors of Venezuelan society can enter Miraflores Palace. It’s estimated that every day more than fifty people try to
On April 13 in Caracas, Venezuelans reject the coup of a year ago and celebrate the Day of Dignity. Photo: Alex Contrerassee the president every day, and more than 700 write letters, with various demands. All of these petitions are answered. By presidential order, the staff is instructed to attend to all the demands of the people, from the smallest to the most complicated.
At the luncheon that Chávez hosted on April 12 in Miraflores’ Bayacá Hall, Colonel Barrientos was seated to my right, and answered all my questions about the head of state.
“The president is an example for all of us,” he said. “He starts working at six in the morning and doesn’t quit until after three AM. He has extraordinary energy, and this gives us a lot of strength.” Although the military no longer has the privilege it did under previous administrations, soldiers are willing to give their lives for the “proceso,” or change process. That’s one thing that makes the Bolivarian Revolution different than many others – the revolution is supported by the masses, but also by the military.
The president’s security chief, Barrientos, has known Chávez since he was a cadet. “He was always a leader, a role model, and a man of unbending will,” he said. “He was never a conformist, and would give us long talks about the revolution.” The top officers of all three branches of the armed forces, he said, support the Venezuelan revolution; the opposition traitors’ numbers are small.
In Spite of the Media Blackout
Although the Venezuelan commercial media – controlled by giant multinational corporations and under pressures from the US government – attack the Bolivarian government twenty-four hours a day, one can’t help but see important changes here, changes that benefit the public.
During the last two years, the government has built 150,000 new housing units. Fifteen thousand of these units were handed over to the victims of catastrophic foods that hit the coastal state of Vargas in 1999. Three thousand Bolivarian Schools have opened, where children get the attention and adequate nutrition they once lacked. More than two million people have drinkable running water for the first time. More than three thousand Venezuelans have received free medical treatment in Cuba. Millions of small farmers have benefited from the “Land Law,” which redistributes unused farmland. The government has tripled the public university budget and raised teachers’ salaries. The privatization of the electric, gas, and water industries has been stopped.
Thousands of men and women fill Bolívar Avenue on April 13, 2003. Photo: Alex ContrerasAs he listed these achievements, the Colonel beamed with pride. This is the “proceso” – the change process supported by the majority of the people of Venezuela, and rejected by the “squalid ones” whose numbers grow smaller every day.
At this time, President Chavez began to speak. “In Venezuela,” he said, “we are developing a model of struggle against neoliberalism and imperialism. For this reason, we find we have millions of friends in this world, although we also have many enemies."
Chavez wore a dark suit, a white shirt, and red tie, at the luncheon. Cuban Vice President Carlos Lage, US sociologist and noted analyst James Petras, the Argentinian activist and leader of the Mothers of the Plaza de Mayo movement Hebe Bonafini, the Brazilian Landless Workers’ Movement representative Jaime Amorín and others were also there. Chávez, as promised, kept his comments brief.
The Hurricane has Begun
Around one in the morning on Monday, April 14, Chavez received three indigenous leaders, all major figures in their own countries, at Miraflores. This authentic journalist had the privilege of witnessing the president's meeting with Bolivian congressman and coca-growers’ leader Evo Morales, Ecuador's indigenous leader Blanca Chancoso, and Honduran peasant farmers' leader Rafael Alegría.
Rafael Alegrìa of Honduras, President Hugo Chávez, Blanca Chancoso of Ecuador, Evo Morales of Bolivia, and Narco News correspondent Alex Contreras, in the Palace gardens.From an unlit garden, Chávez emerged from the shadows wearing jeans, a t-shirt and blue sneakers. This was a casual affair. “Hey, careful Evo, we want you alive!” was the first thing Chávez said as the three greeted him excitedly.
A small table for five people was served. “I don’t drink,” said Chávez, “but let me offer you some wine.”
“We know how to drink, and to make a toast,” someone answered. “To Bolivarian unity!” They shared a smoke as well.
The first thing the leaders talked about was security – the security of the Bolivarian leader, but also of the other leaders, organizers, and activists, opposed to the global policies of the US empire.
I’m sure you will understand, kind readers, that the subjects these leaders went on to discuss were off the record. After the four had spent more than an hour in sincere and relaxed conversation, the time came to say their goodbyes, with a handshake, an embrace, and, of course, a group photo as a souvenir.
“The hurricane of revolution has begun,” Chávez told them, “and it will never again be calmed.”
“We’ll keep the flame burning, comandante,” responded Alegría, the Honduran farmers’ leader.
"We will return, and there will be millions of us,” said Chancoso.
“Thank you, President Chávez,” said Morales, who almost won the Bolivian presidency last year. “I leave here full of ideas for the struggle ahead in 2007,” the next general election in his country.
As we left Miraflores, around three in the morning, the president was just receiving the Cuban delegation, headed by Vice President Carlos Lage. One of the security guards at the palace told us that they have adjusted to Chávez’s rhythm.
“It’s all for the revolution,” he said. “Revolution is synonymous with sacrifice. We should all be willing to sacrifice ourselves for a better future for our children.”
As we walked through the halls and courtyards of Miraflores, from where the fascist coup led by businessman "Pedro, the Brief" Carmona" massacred the Venezuelan people one year ago, I remembered the words of President Hugo Chávez:
“Faced with the outrageous excesses of the powerful, our only alternative is to unite… That’s why I call upon all of you to globalize the revolution, to globalize the struggle for the freedom and equality of mankind.”
MARKET WATCH: Energy futures prices are mixed as OPEC hikes quota
Posted by click at 10:15 PM
in
OPEC
<a href=ogj.pennnet.com>Oil & Gas Journal
Sam Fletcher
Senior Writer
HOUSTON, Apr. 25 -- Energy futures prices were mixed Thursday as ministers of the Organization of Petroleum Exporting Countries meeting in Vienna surprised the market by raising their collective production quota by 900,000 b/d to 25.4 million b/d on June 1, effectively promising to reduce recent overproduction by 2 million b/d.
"The bulk of the 'cuts' needed to balance supply (under OPEC's new quota) and demand in the very short run was provided in late March by OPEC's new shadow member—the coalition forces who 'liberated' Iraq," said Adam Sieminski, industry analyst at Deutsche Bank AG, Germany.
OPEC's decision Thursday was similar to its move last December in simultaneously raising official quotas while reducing actual production. But this time, "OPEC's surprise quota increase unnecessarily confused the market at a time when there is sufficient uncertainty already present, with debate over the return of Iraqi (oil production and export) volumes and concerns over economic recovery and the impact of the SARS (severe acute respiratory syndrome) virus on petroleum demand," said Matthew Warburton, UBS Warburg LLC, New York, in a Friday analysis.
OPEC mistake?
Since world oil inventories are now near record lows, OPEC's "mistake" is not as bad as the one it "made in Jakarta in late 1997 when it endorsed overproduction ahead of the Asian (financial) crisis," Warburton said. However, he said, "By its actions, OPEC has partially undermined (its) substantial recovery in credibility achieved over the last 3 years."
Warburton had anticipated "an unofficial OPEC-10 (minus Iraq) production reduction of 1.5 million b/d over the next 2-3 months from current OPEC-10 production levels of 26.2 million b/d and a reaffirmation of the existing 24.5 million b/d quota. This would have had the double benefit of increasing global inventories at a rate marginally above seasonal norms, as well as preparing OPEC for the reintroduction of Iraqi volumes into world markets later this year."
The second half of this year "may well be dominated by demand uncertainties and an interplay of Iraqi (oil production) growth and Saudi (Arabia's) restraint," said Sieminski. He estimates that OPEC production in May and June will average 25.5 million b/d—26 million b/d, including Venezuela's heavy oil—"as the Saudis gradually lower their own output to accommodate whatever exports are managed from Iraq."
Venezuela and Iraq
On Thursday, OPEC raised Venezuela's production quota to 2.92 million b/d from 2.82 million b/d previously. Although Venezuelan officials claim the country's oil production has recovered to nearly 3 million b/d following a crippling 63-day general strike, many outside observers doubt if Venezuela's production or exports have rebounded to pre-strike levels.
No production quota was set for Iraq. "Our contacts in Washington suggest that Iraq is unlikely to begin exporting again until the (United Nations administered) oil-for-food program is renewed sometime after its June 3 expiry. The strategy of the US administration appears to be to use the next few weeks to inspect oil facilities, make repairs, get Iraq's refineries working again, and begin establishing a temporary governance structure in the country," Sieminski said.
"Waiting until after June 3 to push for exports is seen as strengthening the US-UK position in the Security Council debate at the UN regarding the administration of Iraq's oil," he said. "OPEC ministers set another meeting for June 11 in Doha, Qatar. In our view, this date ties in nicely with the early June battle shaping up at the UN on Iraqi oil."
Moreover, Sieminski said, "By allowing a quota boost now, the ministers are giving themselves a higher base from which to make cuts (to accommodate Iraqi exports). A 'soft landing' for oil prices looks plausible in our view."
Meanwhile, Chevron Nigeria Ltd., a subsidiary of ChevronTexaco Corp., said that, since Apr. 4, it has gradually increased production in the Escravos area of Nigeria to a plateau of 310,000 b/d and has lifted the force majeure declared a month ago as a result of civil unrest in that area. The company set no timeframe for a return to full production, however.
Futures prices
The June contract for benchmark US light, sweet crudes dipped by 1¢ to $26.64/bbl Thursday on the New York Mercantile Exchange, while the July position advanced by 2¢ to $26.35/bbl. Unleaded gasoline for May delivery jumped by 3.12¢ to 87.93¢/gal. Heating oil for the same month was up 2.23¢ to 77.3¢/gal.
The May natural gas contract dropped 9.5¢ to $5.47/Mcf on NYMEX as the US Energy Information Administration reported Thursday the injection of 61 bcf of gas into US underground storage during the week ended Apr. 18. That compares with the withdrawal of 48 bcf of gas the previous week and the injection of 69 bcf during the same period last year. US gas storage now stands at 684 bcf, down 891 bcf from a year ago and 573 bcf less than the 5-year average.
Meanwhile, outages at two US nuclear facilities have resulted in incremental demand for 400 MMcfd of gas since October 2002. Reports of a minor leak at a third unit in South Texas could add another 300 MMcfd of incremental gas demand until that plant is brought back on line in late summer, said Robert S. Morris on Thursday at Banc of America Securities, New York.
Projections for 40 of the largest US gas producers indicate that US gas production dropped by 1.8% during the first quarter of this year, compared with the same period in 2002, said Morris. However, he said, "Companies tend to be optimistic regarding their production outlook, and since we started tracking the largest public producers in early 2000, actual reported results have come in about 0.5%, on average, below initial projections."
Moreover, he said, "Excluding the impact of storm-related shut ins in the Gulf (of Mexico) and price-related voluntary curtailments (of gas production) in the first quarter last year, our models indicate that US natural gas production (during the latest quarter) would have declined nearly 5% (since the first quarter of 2002) and around 1.5% (from the fourth quarter)."
IPE, OPEC prices
In London, the June contract for North Sea Brent oil gained 7¢ to $24.33/bbl Thursday on the International Petroleum Exchange. The May natural gas contract lost 1.1¢ to $2.61/Mcf on IPE.
The average price for OPEC's basket of benchmark crudes plunged by $1.17 to $23.97/bbl Thursday.
Contact Sam Fletcher at samf@ogjonline.com