The Globe and Mail By PATRICK BRETHOUR With files from Bloomberg Tuesday, April 22, 2003 - Page B1

Closing Markets - Thursday, Apr. 24

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CALGARY -- The Organization of Petroleum Exporting Countries appears set to cut back production -- rather than formal quotas -- at an emergency session Thursday to avoid a glut of oil in the latter half of the year.

Those expectations briefly pushed crude prices above $31 (U.S.) a barrel yesterday.

OPEC essentially abandoned its quota system last month, just before the launch of the U.S.-led war on Iraq, aiming to make up for the loss of more than two million barrels a day in Iraqi exports.

The result was production far beyond the formal quota of 24.5 million b/d established in March for the 10 members of OPEC excluding Iraq. According to estimates by the International Energy Agency, OPEC produced 25.88 million b/d in March, even though output from Venezuela and Nigeria was constricted.

Oil prices have remained buoyant, even with the overproduction., largely because of concerns about how long it will take for Iraq to resume production.

So far, predictions of a sharp decline in postwar oil prices have not materialized.

Crude oil for May delivery rose 32 cents to $30.87 a barrel yesterday on the New York Mercantile Exchange, the highest closing level this month for the benchmark contract. In early trading, it touched $31.08 a barrel.

But with global oil production at its highest level on record, OPEC clearly needs to trim its output for fear of seeing crude inventories rise too quickly, one analyst said. "OPEC is pumping an awful lot of oil," said Steve Thornber of Threadneedle Asset Management in London.

However, analysts said OPEC is unlikely to reduce its production quotas, and will instead focus its attention on bringing actual output into line with those formal targets.

Economic and political pressures will both drive OPEC in that direction, analysts said.

The cartel may paradoxically give a stronger upward push to oil prices -- currently just above its preferred range of $24 to $30 a barrel -- by not cutting quotas, said Kyle Cooper, a Houston-based analyst with Smith Barney.

A quota cut would send the message to the market that OPEC is not committed to reducing output, since a reduction from actual production to a lower quota would be unrealistic, Mr. Cooper said. Conversely, a hint of an intent to lower output to current quota levels will signal that OPEC is serious about reducing surplus production.

Tim Evans, a senior energy analyst at IFR Pegasus in New York, agreed that a reduction in OPEC quotas would not translate into additional cuts in production. Saudi Arabia is responsible for much of the overproduction, and it will take as long as eight weeks to reduce its output to even its current quota, Mr. Evans noted.

Any further reduction would be unlikely to take effect until after the cartel's next meeting in early June, he said. "It would be a cosmetic adjustment."

Global politics will also influence the cartel, Mr. Evans said. Saudi Arabia, particularly, will not want to be seen as taking advantage of the United States in the wake of the war on Iraq by cutting quotas to boost oil prices even more, he said. In contrast, a vague statement of intent to cut back excess production will not be seen as a flagrant insult, he said.

On the other side of the equation, OPEC will need to consider the long-term effect of high prices on its control of the global oil market. At higher prices, non-OPEC producers with higher production costs, such as Russia and Norway, are able to increase their output, leaving the cartel with a smaller share of a larger market.

April 22, 2003 By <a href=www.busrep.co.za>BusinessReport.com-Sapa-AP

London - By boosting production ahead of the war in Iraq, Opec succeeded in allaying concerns about a possible oil shortage once the shooting began.

Yet instead of celebrating its achievement, the producers' cartel fears the world is now awash in crude and at risk of a ruinous price crash.

It has called an emergency meeting for Thursday to assess post-war conditions in the oil market, with a view to slashing output to bolster sagging prices.

Opec president Abdullah bin Hamad Al Attiyah has said he believed the world was oversupplied by 2 million barrels a day at a time when seasonal demand normally slips to its lowest level of the year.

But energy analysts warn that crude oil inventories in major importing countries are still alarmingly low. They argue that Opec must be careful not to curb production so much that refiners face low stocks of oil as they head into the northern summer, the peak season for petrol consumption.

"This whole idea that there is a tidal wave of overproduction that's going to sink prices is just wrong," said Adam Sieminski, an oil price strategist at Deutsche Bank in London.

"Inventories are extremely low and Iraq is not producing, so there is no overproduction."

Opec has timed its meeting in Vienna to assess market conditions in the immediate aftermath of the war. This will not be easy, and some analysts argue that such a meeting is premature.

No one knows when Iraq will be able to resume its crude shipments. Nigeria and Venezuela, meanwhile, are still clawing their way back to production levels they enjoyed before social unrest and a national strike, respectively, dented their output.

Yet Opec, which pumps about one-third of the world's oil, is eager to show it is in control of, or at least closely monitoring, a tempestuous market.

Opec's members agreed in January to a production target of 24.5 million barrels a day . They soon overreached their quotas to profit from the high prices preceding the war as much as to reassure markets that supplies would be plentiful in spite of any hostilities.

Opec earned plaudits from the US and other importers for its proactive, and unofficial, rise in output. By some estimates, Opec's 10 members, excluding Iraq, pumped an average of 26.2 million barrels a day last month - 7 percent above their quotas.

But oil prices tumbled as the conflict unfolded. By the time the fighting was over, futures contracts of US light sweet crude had fallen more than one-third, from a high for the year of $39.99 a barrel reached on February 27.

Opec worries that prices may have further to fall.

"I do not think there is any necessity for Opec to carry on with excess production," Iranian oil minister Bijan Namdar Zangeneh said last week in Tehran.

"We should consider a cutback in production to balance supply and demand, especially in the second quarter." Many analysts accept that a production cut may be a foregone conclusion.

Kevin Norrish, the head of commodities research at Barclays Capital in London, said Opec would need to rein in output by 1 million to 1.5 million barrels a day to keep prices from sliding below $22 a barrel - the bottom end of its targeted price range.

Leo Drollas, the chief economist of the London-based Centre for Global Energy Studies, suggested a cut of 650 000 barrels a day would stabilise prices.

But crude inventories are unusually low for this time of year, and a deep cut by Opec would make it harder for importers to build them to comfortable levels.

Claude Mandil, the head of the International Energy Agency - a watchdog agency for the world's leading importers - warned last week that a cut in output would not actually take effect until demand started to rise in the third quarter. - Sapa-AP

<a href=frontpagemag.com>FrontPageMagazine.com By Michael Radu FrontPageMagazine.com | April 21, 2003

Recently, following a pattern understood by all but American liberals, Fidel Castro again did something he always does in response to U.S. efforts to improve relations with Cuba. He answered renewed congressional efforts to weaken the embargo by cracking down on the opposition. In the past, when then-President Jimmy Carter tried to improve ties, we wound up with the Mariel exodus and the emptying of Cuba's jails through migration to the U.S.; when Bill Clinton tried to improve relations, it ended up with American citizens being blown out of the skies  by Castro's fighter planes and yet another mass send-off to Florida. This time, when a combination of greedy Republicans from farm states and leftist Democrats tried to weaken the embargo in the name of free trade, Castro answered by jailing 79 dissidents for sentences totaling over 2,000 years.

Even the communist, Portuguese José Saramago, Nobel laureate in Literature and supporter of any leftist cause this side of the Milky Way, declared in an interview with Spain's El Pais that "This is my limit." ("Saramago critica ejecuciones en Cuba," AP, April 14). This reminds one of the late 1960s, when Castro's Stalin-like purges of intellectuals forced Jean-Paul Sartre, another lifelong fellow traveler, to reach his limit with Fidel. And Miguel Vivanco of Human Rights Watch, whose goal seems to be indirectly helping the Marxist-Leninist terrorists/drug traffickers of Colombia's Revolutionary Armed Forces (FARC) by blasting every effort of that country's democratic government to fight FARC, also seems to have seen the light. He criticized the UN Human Rights Commission's proposed resolution condemning Castro's persecution of dissidents and demanding that they be released as "weak . . . a slap on the wrist."

Those conversions, along with the fact that the UN resolution was submitted by Costa Rica, Nicaragua, Uruguay and Peru, are the good news from a UN organization now improbably chaired by Libya. Costa Rica aside, the Latin sponsors have paid heavy prices in fighting and defeating Marxist-Leninist insurgencies over the past few decades. They know what communism is, does, and may lead to.

There is another, less symbolic but darker side to the issue. Argentine president Eduardo Duhalde, a lame duck but nonetheless representative of his people's feelings, declared that Argentina will abstain from voting on the Resolution, calling the timing of the vote "inopportune" given the "unilateral war [in Iraq] that has violated human rights." Brazil will also abstain and in Mexico some 50 leftist intellectuals and the majority in the Mexican Congress have asked President Vicente Fox to abstain as well. They could not bring themselves to support Havana, but, again using Iraq as a pretext, claimed that abstention is the best way to deal with Castro. As Mexico's human rights ombudsman stated, regretfully, "only poor countries are condemned" and thus, in his logic, condemning Cuba is unfair - in effect asking for some kind of proportional condemnation, regardless of  realities.

Ultimately it comes down to fundamental differences among the Latin countries. The politics of most of the larger of them vis-à-vis the United States are adolescent, based on the desire to demonstrate independence from Washington. Nowhere is this more evident than in Mexico. To support the U.S. position on any matter, from the treatment of rocks on Mars to dissidents in Cuba, is politically dangerous, opening a leader to accusations from the intellectual elites of being a "gringo puppet." These elites have a disproportionate, and usually nocive impact on politics. In Brazil those sentiments are enhanced by most Brazilians' emotional belief that their country, by virtue of its size and relative economic power, is entitled to a leading role that Washington unfairly challenges.

It was the very same adolescent politics that led the left-of-center governments of Brazil, Ecuador, and Venezuela to recently refuse to do the obvious, common-sense thing: to declare as terrorists the three irregular forces-FARC, the smaller, also communist National Liberation Army (ELN), and the anti-communists of the United Self-Defense of Colombia (AUC)-that are trying to destroy or avoid the democratic government of neighboring Colombia. They refused to do so despite the fact that FARC at least, and certainly soon enough the AUC, which is hunting them, operates across the borders in Panama, Ecuador, Brazil, and especially Venezuela, whose government is openly supportive of the insurgents.

In the case of Mexico, which has a seat in the UN Security Council (likely to the chagrin of President Fox), not supporting the U.S. approach to the Iraq issue was not a foreign policy or national interest issue, but one of national identity. Supporting the United States is a "sell out to the gringos." Teenagers of the world, unite!

In Chile, the most rational and pragmatic country in Latin America and certainly the most successful in economic, free-market terms, the story is the same, and equally depressing. President Lagos, a Socialist leading a coalition with the Christian Democrats, had never behaved as a socialist in either economic or political terms until Iraq, when he had Chile withhold support for the United States in the Security Council. Why? Because of anti-Americanism. It does not cost much, it is popular-especially in a country where hating capitalism and the United States is still popular among elites and the small (3 percent in the last elections) but organizationally effective Communist Party. Likewise with enthusiastically supporting whatever Havana does. Furthermore, Santiago, like Ciudad de Mexico, Brasilia, and Buenos Aires, still has difficulty understanding that Washington is less tolerant of adolescent games now than prior to 9/11. When President Bush stated that "those who are not with us are against us" in the war on terror, most Latins did not take it seriously. They may well have to now.

Ultimately, abstaining on or voting against a largely meaningless UN criticism of Cuba is itself irrelevant. However, a combined accumulation of Latin American positions suggests that when it comes to choosing between the obvious violations of freedom by one of their own (Havana) and supporting anything proposed by the United States, most Latin American governments will choose opposing Washington.

Understanding this, now let's consider both Castro's recent summary execution of thee ferryboat hijackers and the broader issue of how these Latin American attitudes toward U.S. global positions will affect their U.S. relations.

On the first issue, there is only one thing to say: a hijacker is a hijacker, period. As for capital punishment, it remains what it always was - a matter of political culture. Latins are fast to condemn US executions, especially when they involve their own citizens, but have little or nothing to say when Castro sentences people to death.

As to the price Latin America will pay, some sort of price for their recent behavior? Mexico is clearly doing its best to diminish, if not destroy, whatever support there was in Congress for the legalization of millions of its nationals living illegally in the United States. Chile was a legitimate applicant for NAFTA membership and possessed all the right social, economic, and political credentials, but it has how raised questions about its belonging there. Instead of facing Congressional opposition only from U.S. Democrats opposed to free trade, it will also now face opposition from Republicans, whether they are for or against free markets.

Washington must make clear that being "anti-gringo" just on principle cannot continue in the age of international terrorism. Behavior should cost in terms of how many benefits one can expect to continue from Washington. Opposing the United States on matters of American security should have a cost in that regard, and Washington should impose it. Mexico, Chile, Brazil, and Argentina should be convinced that the cost is real and immediate.

Michael Radu is Senior Fellow and Co - Chair, Center on Terrorism and Counterterrorism, at the Foreign Policy Research Institute in Philadelphia. ---------------------------__---- My friend, there is a Fifth Column in America, an enemy within. It's the so-called "peace movement." Sign the e-petition to EXPOSE THE ENEMY WITHIN to editors and producers of the nation's largest newspapers, news magazines, and network newsrooms. Click Here to Sign the E-petition

Environmental News Network 22 April 2003 By Magdalena Morales, Reuters

CARACAS, Venezuela — In a conference room at Venezuela's military academy, a group of soldiers listen attentively to a duo of Cuban instructors.

The topic being taught is not revolutionary guerrilla warfare as once practiced by Fidel Castro or "Che" Guevara, but the "organoponic farming revolution," communist Cuba's latest export to its closest South American ally, Venezuela.

Organoponic gardening, a system of concentrated, organic urban vegetable cultivation, is taking root in central Caracas amid the piles of garbage, bands of homeless beggars, and tens of thousands of vehicles belching out polluting gas fumes.

Inspired by Cuba's system of urban market gardens, which has been operating for several years, left-wing President Hugo Chavez has ordered the creation of similar intensive city plots across Venezuela in a bid to develop food self-sufficiency in the world's No. 5 oil exporter.

"Let's sow our cities with organic, hydroponic mini-gardens," said the populist former paratrooper, who survived a brief coup a year ago and also toughed out a crippling opposition strike in December and January.

Inside Fuerte Tiuna military headquarters, soldiers of the crack Ayala armored battalion supervised by Cuban instructors have swapped their rifles for shovels and hoes to tend neat rows of lettuce, tomatoes, carrots, coriander, and parsley.

Since his election in late 1998, Chavez has drafted the armed forces to serve his self-styled "revolution" in a range of social projects, from providing medical services to running low-cost food markets for the poor.

Besides the military vegetable patch in Fuerte Tiuna, the government has also planted a 1.2-acre plot in Caracas' downtown Bellas Artes district, overlooked by towering office blocks and located near the city's main museums.

The market garden, denominated Bolivar 1 in honor of Venezuela's independence hero Simon Bolivar, is being run by an agricultural cooperative set up in a nearby poor neighborhood.

PUBLIC SKEPTICISM

The sight of sprouting vegetables nestling in concrete-lined earth beds behind wire fences in central Caracas causes many passers-by to stare in puzzlement.

"This might be all right to provide for a family but not to feed a country," scoffed Diego Di Coccio, a 40-year-old unemployed businessman.

"They should use the money to unblock the drains," said chemical technician Hector Gonzalez, pointing to the piles of rubbish in the streets around.

Skeptics question why resource-rich Venezuela should need urban vegetable gardens when it has hundreds of thousands of acres of fertile farming land, much not in use.

The national farmers' federation Fedeagro, which groups 52 local associations around the country, says it is not opposed in principle to the urban food program. But it demands more government support for the farming sector, which contracted around 10 percent between 1998 and 2002.

"The problem is that it looks as though the government is concentrating all its efforts on these city farming plots, and yet the national sector remains in the state it's in," said Fedeagro's technical adviser Nelson Calabria.

Private farmers and ranchers also accuse the government of threatening private property with a socialist-inspired agrarian reform law that says idle, uncultivated rural estates can be expropriated and distributed to landless peasants.

But Chavez, a tough-talking nationalist, defends the urban garden plan as a necessary strategy to ward off the threat of food shortages and wean the country away from its high dependence on imports. Traditionally, more than 60 percent of the nation's food needs are imported.

To the derision of critics, Chavez has also suggested that Caracas' slum dwellers, whose ramshackle hilltop homes ring the city, should raise crops and chickens on their balconies and rooftops. Turn your homes into "vertical henhouses," he said.

The president, who is accused by his foes of ruining the oil-reliant economy with his anticapitalist rhetoric and interventionist policies, has also vowed to break what he says is a stranglehold on domestic food production held by rich "oligarchs" opposed to him.

During the recent opposition strike, Chavez ordered troops to temporarily seize and search some privately owned food plants, which he said were deliberately hoarding food supplies.

CUBAN INFLUENCE

Critics of the president say he is using strict foreign exchange and price controls introduced this year to wage a vendetta against his business foes by denying them scarce U.S. dollars and forcing them to lower their prices.

Others ridicule the urban vegetable gardens as little more than a political gimmick and another sign of Chavez's close ideological ties with his friend and ally Cuban President Fidel Castro, whom he regularly salutes as a revolutionary soulmate.

Since Chavez came to power, Venezuela has become Cuba's single biggest trading partner, supplying the island with up to 53,000 barrels per day of oil in a bilateral energy agreement. Several hundred Cuban doctors, sports trainers, and technical advisers in areas like sugar farming are working in Venezuela.

Although the U.N. Food and Agriculture Organization (FAO) also backs the Venezuelan urban farming project, the main inspiration and training comes from specialists from Cuba.

The collapse from end-1989 of the Soviet bloc, Cuba's main political ally and supplier, plunged the island into economic crisis, and its government started up urban vegetable plots to counter critical food shortages caused by the loss of key farm-related imports like fertilizers and pesticides.

Cuba claims that 50 percent of the vegetables produced on the island come from urban gardens, but local residents complain that the produce is poor and there are persistent shortages.

"It was established that the main task of the revolution should be to produce food," Cuban Gen. Sio Wong, who is supervising the Venezuelan project, said in Caracas.

HEALTH BENEFIT OR HAZARD?

He hailed the benefits of the Caracas city plots. "No chemical products are used, so these are the healthiest vegetables that Venezuelans will eat," he said.

But Venezuelan experts wonder whether the polluted atmosphere of central Caracas could turn the city-center vegetables into a health hazard. They say that the smog-filled air contains concentrations of carbon monoxide and lead that could contaminate growing plants.

Despite the criticism, Chavez's government and its Cuban advisers are enthusiastic about the project, which involves an initial investment of around $2 million. The Agriculture Ministry hopes to plant 2,470 acres of such urban vegetable gardens this year and aims to supply about 20 percent of the nation's vegetables through the program.

"The Hanging Gardens of Babylon that appear in the Bible were basically urban gardens," said Adolfo Rodriguez, head of Cuba's Urban Agriculture Project.

<a href=news.ft.com>FinancialTimes.com By Robert Graham

Published: April 22 2003 5:00 | Last Updated: April 22 2003 5:00 The air of injured innocence is slowly evaporating among the key defendants in France's biggest ever corruption trial.

In all, 37 people have been charged with siphoning off almost €400m (£276m) in the late eighties and early nineties from Elf, then a French state-owned oil group.

After a month of hearings, the whereabouts of most of the funds remains a mystery.

But the trial judge has succeeded in teasing out the lavish whims of Elf executives and their acolytes, forcing many to own up to serious personal enrichment.

Loïk Le Floch-Prigent, Elf's chief executive from 1989 to 1993 and a central figure in the case, admitted his personal gains with masterly understatement, saying: "Things got out of hand."

Accused of removing €183m of Elf money, and now in poor health as he serves a 2½ year prison term imposed at a previous corruption trial, he appears relieved to confess. "I see this as an occasion to get things off my chest," he said.

Alfred Sirven, who handled many of Elf's pay-offs to middlemen and foreign dignitaries, and is charged with siphoning off €168m, has been a little less contrite.

Soon after the judicial investigation began in 1994 he went on the run, and police only caught up with him in the Philippines in 2001. "I am guilty of certain things: this I have known for a long time, but all the same that does not really explain how these things happened," Mr Sirven observed in his gravelly voice.

These men and the other defendants are bitter that their political superiors are absent from the dock - even though they claim Elf was used as a secret treasury for under-the-table state activities from the foundation of the Fifth republic in 1958 until the group's privatisation in the mid-1990s. But - as the sharp-tongued judge Michel Desplan has reminded them - this is no answer to the serious corruption charges. Mr Le Floch-Prigent has, for instance, been asked to justify the purchase of a $9.3m Paris mansion, a chateau and a divorce settlement after 18 months of marriage that cost Elf €4.5m.

He replied: "At Elf everything was exaggerated. It eroded one's sense of reality . . . I allowed myself to get carried away."

At first he insisted the luxury town house had been bought for corporate relations with the ulterior purpose of being for the use of president Omar Bongo of Gabon, where Elf had vital oil interests. (A €115,000 kitchen redecoration was initially classified under the heading of 'gabonisation' of the house.)

But Fatima Belaid, Mr Le Floch-Prigent's ex-wife, told the court that the place was for her ex-husband's "personal use", and that its ownership was concealed to avoid taxes.

This prompted the judge to ask Mr Le Floch-Prigent: "For company representation, was not this place too much even for the president of Elf?" His reply became one of the most quoted lines from the case: "It was a folie des grandeurs. Let's say it was a mistake; but it was not a crime."

To defend the fact that his expensive divorce was settled through offshore Elf bank accounts, Mr Le Floch-Prigent invoked his close relationship with the late president François Mitterrand.

The court heard he told the president that if the divorce turned messy there was a risk his ex-wife might reveal what she knew of Elf's activities, causing "collateral damage" to Elf's African clients as well as the president's son Jean-Cristophe, who handled African affairs at the Elysée Palace.

This was the first time Mr Mitterrand had been overtly linked to corruption at Elf during the trial, although the group's top appointments were approved by him.

Mr Le Floch-Prigent claimed Mr Mitterrand told him: "Get on with it and settle the problem". This, he understood to be the go-ahead "to settle the divorce with secret funds."

On the broader issue of where Elf's secret funds went, Mr Le Floch-Prigent has admitted he knew of a "black box" containing some $5m a year. Nevertheless, he said he knew nothing about how the contents were used.

That task was in the hands of Mr Sirven and André Tarallo, head of Elf's Gabon subsidiary and the company's principal contact with African leaders, who is accused of corruptly handling €35m.

Neither man has yet been forthcoming about the money trail. Mr Tarallo has been the more explicit, claiming at one point that in 1990 President Bongo feared he was about to lose French backing for his long-standing authoritarian rule and needed a "savings bank" as insurance against losing power.

The trial is in its early stages, and evidence about Elf's dubious foreign operations is expected to be heard throughout May.

This could yet throw light on kickbacks paid by Elf over a deal between Mr Mitterrand and Germany's ex-chancellor Helmut Kohl to invest in the Luena refinery in East Germany - an affair which helped bring Mr Kohl down.

Also under scrutiny will be oil contracts in the North Sea and Venezuela and the purchase of Spanish group Ertoil.

But many observers will be watching most keenly for more folies des grandeurs.