Forbes.com-Reuters, 04.22.03, 6:22 PM ET

CARACAS, Venezuela, April 22 (Reuters) - Venezuela's President Hugo Chavez on Tuesday said the Brazil's National Development Bank would offer a $1-billion line of credit for Venezuelan projects as his government struggles to cover a deep financial shortfall. Leftist Chavez plans to hold talks on Thursday with his Brazilian counterpart Luiz Inacio Lula da Silva in Brazil, where he said officials would finalize the details of the credit agreement. "We will be shaping and putting the final financial touches to an agreement in which Brazil's National Development Bank has offered Venezuela ... a line of credit for up to $1 billion," Chavez said. The Venezuelan leader did not provide further details. Brazil's National Development Bank had previously provided financing for construction works such as an Orinoco River bridge in Venezuela. Venpres official state news agency said that the credit line would go to agricultural projects and small and medium industry. Venezuela's economy has slipped into sharp recession after a year of political conflict between Chavez and opponents demanding early elections in the world's fifth largest oil exporter. Chavez, a former paratrooper, survived a brief military coup in April last year. The nation's economy contracted nearly 9 percent in 2002 and many economists are forecasting a double-digit contraction for this year after a grueling opposition strike disrupted the oil shipments that account for half of government revenues.

<a href=www.vheadline.com>Venezuela's Electronic News Posted: Tuesday, April 22, 2003 By: David Coleman

Venezuelan Ambassador to Washington, Bernardo Alvarez Herrera has issued a statement in support of Foreign Minister (MRE) Roy Chaderton Matos' weekend statements that the US State Department is being fed false information about Venezuela  ... he says "as regards the confusion over the political process in Venezuela, there are many (competing) circles of power in the United States."

Speaking to a group of investors at a special meeting of the Venezuelan American Association of the United States (VAAUS)  in New York this morning, Ambassador Alvarez Herrera referred to articles in the 1999 Constitution which oblige any public official to submit to revocatory referendums.

"This is not an option, nor is it within the gift of the National Executive.  It is in the Constitution that the people, once they have collected a certain number of (verifiable) signatures, may call a referendum to revoke the mandate of any person who has been elected ... all the way from the President to Town Mayors ... there are certain sectors that have a qualified interest to hide this fact!"

Alvarez Herrera added that friends of Venezuelan opposition leaders in the United States should help them to prepare for the electoral defeat that they will suffer in a referendum against President Hugo Chavez Frias.  "Despite all the attacks, among which they have attempted a military coup d'etat and an economic coup, President Chavez Frias remains in power thanks to his thoroughly democratic form of government and significant majority support among the people."

In separate news, Ambassador Alvarez Herrera announced that on May 5, the Venezuelan government will be relaunching its petroleum industry at an international level during trade negotiations at the Offshore Technology Conference in Houston, Texas. He says "it will be PDVSA's second debut on the international market and, among others, former OPEC Secretary General Ali Rodriguez Araque (now PDVSA president), Energy & Mines (MEM) Minister Rafael Ramirez and principal Venezuelan petroleum sector executives will be on hand to show Venezuela's new policy developments on oil in the wake of the new Hydrocarbons Law as well as to promote business opportunities with private sector investors.

Our editorial statement reads: VHeadline.com Venezuela is a wholly independent e-publication promoting democracy in its fullest expression and the inalienable right of all Venezuelans to self-determination and the pursuit of sovereign independence without interference. We seek to shed light on nefarious practices and the corruption which for decades has strangled this South American nation's development and progress. Our declared editorial bias is pro-democracy and pro-Venezuela ... which some may wrongly interpret as anti-American. Roy S. Carson, Editor/Publisher Editor@VHeadline.com

Forbes.com-Reuters, 04.22.03, 5:38 PM ET By Manuela Badawy NEW YORK, April 22 (Reuters) - The government of Venezuelan President Hugo Chavez is seeking to attract foreign investors to help develop new oil projects following a crippling anti-government general strike that slashed oil revenues of the world's No. 5 crude exporter earlier this year, Venezuela's ambassador to the United States said on Tuesday. The OPEC nation will tender two new oil fields to foreign companies before the end of this year to oil majors from the United States and Europe, Ambassador Bernardo Alvarez told investors in New York. On the block are the Orocual field in the eastern Furrial region and Tomoporo, which has about 500 million barrels of estimated oil reserves, from the western Lake Maracaibo area. Among the companies interested in operating the fields are Exxon Mobil Corp. (nyse: XOM - news - people), ChevronTexaco (nyse: XOM - news - people), Marathon Oil Co. (nyse: XOM - news - people), Italy's ENI <ENI.MI>, France's TotalFinaElf <TOTF.PA>, Norway's Statoil <STL.OL> and Spanish-Argentine company Repsol-YPF <REP.MC>, said Alvarez, who previously served as a Venezuelan vice-energy minister. Alvarez said U.S.-Venezuelan energy relations should be strengthened as the economies of both countries are interconnected. Venezuela in the past has supplied up to 14.7 percent, about 1.7 million barrels per day (bpd), of all the oil imported by the world's largest consumer, he said. Venezuela's crude exports, which provide half of the government's revenues, were severely cut during the two-month strike started Dec. 2 by opponents of President Hugo Chavez. The loss of shipments from one of its top four suppliers sent U.S. crude prices soaring before troops and replacement workers restored Venezuela's oil production. Government officials say Venezuela's state oil firm Petroleos de Venezuela S.A. (PDVSA) is now pumping at pre-strike levels of over 3 million barrels per day (bpd) of oil. But analysts say that PDVSA may be seeking foreign investment to help compensate for losses incurred during the strike which forced cuts in the exploration and production budget of South America's largest oil firm. Venezuela's oil fields have natural depletion rates of about 25 percent per year, forcing PDVSA to invest heavily to maintain production capacity. Foreign companies have been critical of a nationalistic hydrocarbons law passed by Chavez in 2001 that increased royalty payments and the minimum level of state participation in oil developments. They say the terms are not competitive with contracts offered by other countries and need to be amended. Earlier in April Venezuela approved ConocoPhillips' (nyse: COP - news - people) $480 million development plan for the Corocoro field in country's Gulf of Paria West area, which the U.S. oil major was awarded during under a profit-sharing agreement in 1996. Corocoro is expected to reach output of 55,000 barrels per day of 24.5 degrees API oil two and a half years after development begins, ConocoPhillips said. The field partners are ConocoPhillips with Italy's Eni and Taiwan's Chinese Petroleum Corp. PDVSA also has a 35 percent stake in the field

Forbes.com-Reuters, 04.22.03, 5:18 PM ET   CHICAGO (Reuters) - Gold edged up to another three-week high Tuesday, piggybacking off a weaker dollar that drew in European demand before a rally in Wall Street stocks diluted investor interest in the safe-haven metal. In other commodity markets, oil prices closed lower as the May crude oil contracts expired at the end of the day. Cocoa prices spiked higher as speculators dove back into the market but grain prices closed mostly lower on cash market signals. At the COMEX, gold for June delivery closed up 90 cents at $334.80 an ounce, trading down from an early peak at $336.80, which was its best price since April 2. On Monday, New York gold traders had pushed the contract up by $6.30 while London, Sydney and Hong Kong were out of the liquidity pool on a four-day Easter holiday break. Gold bullion closed at $334.00/70, up from Monday's late quote at $333.20/95. London bullion dealers had earlier fixed their afternoon spot reference price at $334.90. World financial markets are back to worrying about economic growth and profits now that the United States has shifted from waging war in Iraq to rebuilding, hunting for suspected weapons of mass destruction and searching for former Iraqi officials. The euro rose to $1.1002 Tuesday, the highest since it neared a four-year peak March 12, which made dollar-priced gold more affordable to European investors. But the euro trimmed gains on rumors that former Iraqi leader Saddam Hussein had been captured, which also helped the Dow Jones industrial average bounce from a 60-point morning loss to close 156 points higher at 8,484. Wall Street's recovery also allowed silver -- more sensitive to industrial demand than gold -- to grab the baton and sprint to its best level in more than five weeks. May silver closed 6.2 cents higher at $4.597 an ounce. "As long as you see the dollar continue to remain pressured, then I think you can continue to see upside in gold," said analyst David Meger at Alaron Trading in Chicago. "One of the things that could stop that would be a strong continuation of the equity market rally." At the New York Mercantile Exchange, May crude oil futures closed 3 percent lower as speculators exited before expiry. A sharp drop in oil product prices and squaring ahead of weekly U.S. petroleum inventory data also added to the day's slump. NYMEX May crude oil closed 96 cents lower at $29.91 a barrel. In London, Brent June crude fell 42 cents at $25.46. Gasoline futures sank as the cash market at the Gulf of Mexico weakened, with traders reporting Gulf refiners selling, not buying, gasoline. Venezuelan state oil firm Petroleos de Venezuela also lifted a force majeure, or suspension, of gasoline exports, weighing on gasoline prices. May gasoline closed 3.24 cents lower at 87.74 cents a gallon. May heating oil fell 2.22 cents a gallon at 77.86. The main event of the week remains the Thursday meeting in Vienna of the Organization of Petroleum Exporting Countries. OPEC producers are worried that American oil firms will follow U.S. tanks into Baghdad, spurring sharp rises in crude output under a new Iraqi government. For years, OPEC could rely on Saddam's sanctions-hobbled production to prop up prices. Now it must brace for a resurgent Iraqi oil industry with the potential to join leading OPEC player Saudi Arabia and non-OPEC Russia in the world's top three "swing" producers. Iran has already raised the prospect of an OPEC price war, music to the ears of economies hamstrung by soaring oil costs. "Iraq for many years has been a huge factor supporting oil prices," said Gary Ross at the PIRA Energy consultancy. "That's no longer the case. Now Saddam has gone, the perceptions of how OPEC can manage the market have changed." At the New York Board of Trade, cocoa soared as a wave of buying based on chart-watching speculators began in London and carried over "across the pond" to New York. Cocoa for May delivery closed $87 higher at $2,008 per metric ton, the first close over $2,000 since April 9. Physical cocoa supplies keep tightening after months of civil war in top producer Ivory Coast. There were no delivery notices tendered against the May contract Tuesday, leaving the cumulative total at just 7 lots. At the Chicago Board of Trade, wheat and soybeans closed lower on cash market signals. Soybean barges traded 2-3 cents a bushel lower at the U.S. Gulf of Mexico export gateway Tuesday, pressuring futures. In Toledo, Ohio, more wheat was registered as eligible for delivery against May CBOT futures, surprising a market worried about tight old-crop supplies. Wheat for May delivery closed 2 cents a bushel lower at $2.88-1/4 and May soybeans fell 6-1/2 cents at $6.10 a bushel. Corn for May delivery closed unchanged at $2.38-3/4.

Forbes.com-Reuters, 04.22.03, 4:49 PM ET

(Adds Giordani's return, analyst's quotes, background) By Silene Ramirez CARACAS, Venezuela, April 22 (Reuters) - Venezuelan President Hugo Chavez Tuesday brought back a veteran left-wing soulmate to serve as his Planning Minister after firing the previous minister for disagreements over economic policies.

Former paratrooper Chavez, whose oil-rich nation is facing its deepest recession in recent history, demanded 48-year-old economist Felipe Perez resign after sharp differences had emerged among members of the president's economic team.

But the biggest surprise came when Chavez named his successor, bringing back 62-year academic Jorge Giordani, who had been the president's first Planning Minister for the first three years of his rule in the world's No. 5 oil exporter.

The announcement came as a shock to many analysts, who had welcomed Giordani's substitution by Perez back in May last year, soon after a dramatic military coup that briefly toppled populist Chavez. They saw Giordani as closely associated with Chavez's left-leaning statist economic policies which have been fiercely opposed by business and labor opponents.

"It was a surprise to a lot of people. I don't think that people expected this," Jose Cerritelli, Andean economist with Bear Stearns in New York, told Reuters.

He recalled that Chavez, who has spooked many investors with his fiery, revolutionary and anti-capitalist rhetoric, had praised Giordani recently for being "an anti-IMF policy maker". Giordani's return was likely to lead to an even wider divergence between Chavez's government and Washington-based lending agencies, Cerritelli added.

"Felipe (Perez) made a great effort in a very difficult period. Now Jorge (Giordani) is coming back to take up again all the main objectives of the great national development project that he used to direct," Chavez said.

POLITICS OVER ECONOMICS

Perez, who has a Ph.D from Chicago University, had publicly disagreed with Chavez's decision, backed by most of the rest of the government economic team, to decree tight foreign exchange and price controls earlier in the year.

Perez had also had differences over forecasts and polices with Finance Minister Tobias Nobrega and directors of the country's Central Bank.

His departure came at a time when Chavez's government was struggling to cope with the deep recession triggered by months of political turmoil and an opposition strike that slashed oil output in December and January. The strike, which fizzled out in early February, severely cut government revenues.

Many local analysts were aghast over the return of Giordani. "It's incredible. This is a minister who left because he failed in the first three years when the economy was quite prosperous. And now Chavez brings him back when the situation is worse," Orlando Ochoa, an economist from Caracas's Andres Bello Catholic University, told Reuters.

"It shows that Chavez's priority is politics, not the economy," he added.

Perez had also been seen as a follower of Chavez's self-styled "revolution" in Venezuela. Under Giordani, the Planning Ministry had been the leading voice in Chavez's economic team.

But Perez's influence, and his credibility among local and foreign investors, waned quickly as he became known for unrealistic forecasts and eccentric public pronouncements calling for "positive thinking" to turn around the economy.

Appearing on his "Hello Economy" show on state television, Perez regularly berated local businessmen for what he called their negative attitude and recommended a change of heart.

BATTLE FOR INFLUENCE

Finance Minister Nobrega, a banking and finance specialist has been spearheading the government's efforts to negotiate voluntary debt swaps with local and foreign bankers to ease a payments crunch.

But analysts said the return of Giordani, who had dominated the government's economic policy when he was in office, could lead to a confrontation with Nobrega.

"I think there could be trouble with Nobrega as they are both strong figures," said Benito Berber, an analyst with New York-based consulting firm IDEAGlobal.

Venezuela's already faltering oil-reliant economy went into a nosedive after the grueling opposition strike, which failed to force Chavez to resign and hold early elections.

Opponents of Chavez accuse him of ruling like a dictator and of dragging oil-rich Venezuela towards economic ruin by trying to install Cuba-style communism.

The strike caused the government to slap tight foreign exchange and price controls onto the economy to stem heavy capital flight and halt a sharp slide in the bolivar currency.

The International Monetary Fund, which urged Venezuela to ditch the currency curbs, has forecast a huge 17 percent contraction for the economy this year following a fall of nearly 9 percent last year. (Additional reporting by Pascal Fletcher, Patrick Markey)