eastbay.bizjournals.com 2:14 PM PST Friday  Alan Doyle  

Three of the five oil companies with East Bay plants are the top importers of crude from Iraq, according to U.S. Department of Energy statistics for January, the most recent month for which figures are available.

A fourth refiner, San Ramon-based ChevronTexaco Corp. – which operates the East Bay's largest refinery in Richmond – said it is suspending purchases of Iraqi crude for its U.S. refineries. The nation's second-largest oil company said the decision was based on market conditions and uncertain continuing supplies, not because of political fallout as President Bush prepares to wage war on Iraq. ExxonMobil Corp., the nation's largest refiner, also said it had stopped loading Iraqi crude for U.S. refineries.

The three refiners still buying Iraqi crude through middlemen under terms of the embargo imposed by the United Nations in 1991 after the last war with Iraq are Valero Energy Corp., ConocoPhillips and Motiva Enterprises LLC, a joint venture between the Royal Dutch/Shell Group and Saudi Aramco. Valero and ConocoPhillips previously said none of the Iraqi crude was bought for their refineries in Benicia and Rodeo. Motiva doesn't do business in the West.

The Department of Energy reported Valero, the nation's largest independent, was the biggest U.S. purchaser of crude in January, importing 140,000 barrels per day, up from 48,000 in the fourth quarter of 2002. ConocoPhillips imported 101,000 bpd and Motiva was the fifth-largest importer at 65,000 bpd, according to the federal agency.

Total U.S. imports of Iraqi crude rose to 600,000 bpd from 366,000 bpd in December, according to the DOE. Much of that increase was thought to be attempts to offset shortages caused by the oil strike in Venezuela, normally the fifth-largest exporter of crude to the United States.

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Venezuela said has boosted production to 2.1 million bpd since the strike ended last month. Production had dropped as low as 390,000 bpd, forcing refiners to scramble for other sources of crude and persuading other OPEC nations, including Saudi Arabia and Nigeria, to increase production.

Overall, Saudi Arabia remained the top source of U.S. imports in January, with 1.82 million bpd, or 21 percent of the total 8.55 million bpd total, according to the DOE. Production rose from 1.15 million bpd in December.

Canada remained second at 1.62 million bpd, up from 1.49 million bpd in December; Mexico dropped to 1.57 million bpd from 1.73 million bpd. Nigeria remained fourth, at 798,000 bpd, up from 625,000 bpd in December.

Reach Doyle at adoyle@bizjournals.com.

news.ft.com By Carola Hoyos in Paris Published: March 14 2003 22:12 | Last Updated: March 14 2003 23:55

The International Energy Agency, which co-ordinates oil stock releases, has given its first indication that its 26 members will tap into their strategic reserves in the event of war in Iraq.

Claude Mandil, head of the IEA, said consuming countries, as well as members of the Organisation of Petroleum Exporting Countries, would release stocks if military action disrupts oil production in the region.

"What we need to convey to the market is that the shortfall will be offset by both consuming countries and producing countries," he told the Financial Times.

Oil prices, up to almost $40 a barrel last month, have been falling sharply in recent days as it emerged that the campaign would start later than expected.

By Friday evening, April Brent crude was $1.27 lower at $30.38. The May contract fell $1.63 to $30.14. Any suggestion that the IEA members could release part of their 4bn barrels of stock could drive prices lower.

Mr Mandil insisted that the IEA would seek to counter the effects of any supply disruption. "If the market is tight, if the stocks are very low and if you have a sharp decrease of 2.5m barrels per day - which will be the case if Iraq and northern Kuwait were stopped - I would call it a supply disruption."

The fact that the agency appears ready for only the second time in history to release its oil stocks points to the imminence of war, analysts said.

In January 1991, the announcement that the IEA would release 2.5m b/d of oil from its strategic reserves coincided with the start of the air campaign. It prompted a record-breaking free fall in oil prices to $10.56 a barrel.

Friday's price fall was aided by comments from Spencer Abraham, US energy secretary. He said Washington reserved the right to make a unilateral release from its Strategic Petroleum Reserve without reference to the IEA. The US has about 600m barrels at its disposal.

The IEA said it did not believe the Opec cartel had enough spare capacity to offset the interruption caused by war. Conflict would affect Iraqi production of about 2m-2.5m b/ d and would probably cause a precautionary reduction of Kuwaiti output.

It warned of a potential shortfall of 1.68m b/d if the US went to war in Iraq in the second half of this month. That deficit would, however, drop to only 580,000 b/d if the Bush administration waited until April, when demand for heating oil is expected to drop as winter ends in the northern hemisphere. Saudi Arabia could also bring on stream its more inaccessible spare capacity.

How much oil the consuming countries will release will therefore be calculated on the basis of these assumptions and will depend on the timing of any war.

www.arabnews.com Agence France Presse

MOSCOW, 15 March 2003 — Saudi Arabia and Russia are coordinating their efforts to stabilize oil prices despite the Iraq crisis and maintain prices at levels desired by OPEC and Moscow, Minister of Petroleum and Mineral Resources Ali Al-Naimi said yesterday.

Riyadh and Moscow are both seeking “to ensure the stability of the world oil market and fair prices,” Al-Naimi said after talks with his Russian counterpart Igor Yusufov, as quoted by the Interfax news agency.

“We favor a fair level for oil prices, defined by OPEC (the Organization of Petroleum Exporting Countries) at 22 to 28 dollars a barrel, and that in no way contradicts the price level set by the Russian Federation of $20 to $25 per barrel for benchmark Ural,” Al-Naimi said.

Fears regarding the uncertainty surrounding a possible war in Iraq have seen oil prices rise sharply, with the current price standing at $33 a barrel.

“Halt the war situation and the prices will fall,” Al-Naimi said.

The minister hinted that Saudi Arabia might not be able to make up the market shortfall in supplies of crude if Iraqi production should be halted because of a war.

“Until now Saudi Arabia has been able to compensate for oil shortages on world markets, but I can only speak about hard facts,” he said.

“When there was a strike in Venezuela and oil supplies on the world market dropped, we were able to make up the difference. I can’t say what would happen in the hypothetical case” of a war in Iraq,” he stressed.

On Thursday, the first day of his visit, Al-Naimi noted that Saudi Arabia in February used 90 percent of its current 10.5 million barrels a day capacity.

Like Saudi Arabia, Russia is a major oil producer, but it is not a member of OPEC.

www.sfgate.com Friday, March 14, 2003
(03-14) 11:29 PST (AP) --

Arrests warrants are out for seven executives of the state-oil monopoly, Petroleos de Venezuela S.A. The seven are in hiding.

Secret police stormed an opposition march Saturday in an attempt to arrest oil executive Juan Fernandez, who made a surprise brief appearance. The police clashed with protesters, and Fernandez got away.

Opposition leaders have denounced the arrest warrants as political persecution. Chavez says strike leaders must be imprisoned for at least 20 years for inflicting suffering on the population.

Ortega is third Chavez opponent to seek asylum abroad.

Last year, Colombia granted asylum to business leader Pedro Carmona, the figurehead in an April coup that ousted Chavez for two days. El Salvador granted asylum to another alleged coup leader, Vice Admiral Carlos Molina Tamayo.

Chavez opponents accuse him of steering Venezuela's economy into recession with leftist policies. They also say he has accumulated too much power under the guise of a "social revolution" to help the poor.

Chavez says his foes resent his efforts to end social inequality and his success in wresting power from two corrupt traditional parties that ruled Venezuela for 40 years until his 1998 election.

Chavez fired 15,000 workers from the oil monopoly -- almost half the workforce -- for participating in the stoppage. He has threatened to close down four private television stations that gave supportive coverage to the strike.

Venezuela's oil industry -- the source of half of government income and 80 percent of export revenue -- is recovering from the strike. Oil production has reached 2.9 million barrels a day, according to the government. Fired PDVSA executives say it's only 2.1 million barrels a day, about two-thirds of what it was before the strike.

Venezuela was the world's fifth-largest oil exporter before the strike.

A study by Banco Provincial this week predicted Venezuela's economy would shrink more than 40 percent in the first three months of the year. That would follow a 9 percent contraction in 2002.

www.vheadline.com Posted: Friday, March 14, 2003 By: Patrick J. O'Donoghue

In a weird incident, which seems to becoming common place as rumor takes over from facts, Accion Democratica (AD) leader and opposition chief negotiator, Timoteo Zambrano has come out with a red face after requesting the International Red Cross to search for the estranged wife of President Hugo Chavez Frias, Marisabel Rodriguez.

Reporters discovered Marisabel  shopping for shoes in her native Barquisimeto where she told them that she is in good health and was surprised to hear breaking news that she had “disappeared.”

The former First Lady says she continues to get on with her life keeping a low profile.

“What happened today is a dangerous game at a time when the country needs understanding.”

Zambrano has tried some damage control saying he was tipped off that the President’s former wife was missing. “I can’t reveal the source but it wasn’t, as some media sources allege, a family member … I acted in good faith and am glad to find that she is well."