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Many Venezuelans have a lot of time on their hands anyway -- massive oil shortages have caused long lines at the gas station.

    CARACAS, Venezuela, Feb. 27 —  If you thought Venezuela’s political crisis seemed to be dragging for an impossibly long time — you were right. In a bizarre mass-malfunction, Venezuela’s clocks are ticking too slowly due to a power shortage weakening the electric current nationwide. By the end of each day, the sluggish time pieces still have another 150 seconds to tick before they catch up to midnight.          “EVERYTHING THAT HAS to do with time-keeping has slowed down. If it’s an electric clock, it’s running slow,” said Miguel Lara, general manager of the national power grid.        “Your computer isn’t affected. Your television isn’t affected. No other devices ... just clocks,” he added.        The meltdown has taken a total 14 hours and 36 minutes from Venezuela’s clocks over 12 of the past 13 months, he said.        In a country fiercely divided between friends and foes of its leader, President Hugo Chavez, it isn’t surprising some opponents have jokingly blamed the clock chaos on the president.        But instead it appears to be Mother Nature that lashed out against Father Time. The river powering a major hydroelectric plant in southeast Venezuela lost force due to a severe drought in February 2001. To prevent blackouts, the country slightly lowered the frequency of the current.        At least one time expert was caught off guard.        “It’s the most bizarre thing I’ve ever heard of,” said Dan Nied, head of the U.S.-based School of Horology, or the science of time measurement. “But yes, clocks would slow down.”        For common quartz clocks, the slight drop in frequency slows the vibration of the crystal that regulates time keeping, he said, adding, “People must be going nuts.”        But in a nation that rarely starts on schedule, Venezuelans have taken their time troubles in their stride. An air traffic controller casually told Reuters that his office corrected its clocks every few days or months, without incident so far.        “Yes, it’s been happening here. But we correct the clocks every three months and there’s no problem,” he said.        Many people on the streets of Caracas were only vaguely aware that their clocks had been slowing down.        “I wake with the sun,” said Rene Osurna, who works at a shipping company. “And if you’re two minutes late to the office, and everybody else is too, there’s no problem.”

reuters.com Thu February 27, 2003 04:01 PM ET (The following statement was released by the rating agency)

NEW YORK, Feb 27 - Moody's Investors Service confirmed the Ba3 senior implied and senior unsecured long-term ratings of CITGO Petroleum Corporation, concluding a review of those ratings for possible downgrade. The outlook for those ratings remains negative.

At the same time, Moody's assigned a rating of Ba2 with a negative outlook to CITGO's $200 million senior secured Term B Loan. The ratings confirmations reflect CITGO's enhanced liquidity position following the expected completion of three financings totaling $950 million.

The financings will alleviate near-term liquidity stress stemming from the disruptions in crude deliveries under CITGO's long-term crude supply agreements with affiliates of its parent, Petroleos de Venezuela (PDVSA, rated Caa1, developing outlook). They include a $550 million Senior Note issue and a $200 million senior secured three year term loan, together providing $750 million of new cash, and a $200 million accounts receivable facility that will provide replacement funds for a similar recently canceled facility. These funds will help address CITGO's working capital needs, including the impact of shortened payment terms on third party crude purchases and maturing bank letters of credit that will need to be repaid or refinanced.

Moody's also has factored into the ratings the expectation that, to the extent CITGO maintains adequate liquidity for its own internal needs, these financings will provide cash to retire some portion of PDV America's $500 million of senior notes that mature in August 2003. The Ba2 rating for the senior secured loan, which is one notch above CITGO's senior unsecured ratings, reflects the underlying quality of the pipeline assets and liquidity of the stock being provided as collateral to lenders.

The $200 million loan will be secured by CITGO's 15.8% equity stake in Colonial Pipeline Company (rated A2/Prime-1) and 6.8% stake in Explorer Pipeline Company (rated Prime-1), two common carrier product pipelines with stable cash flows and fairly ready equity valuations based on cash flow multiples and other recent transactions. Moody's is maintaining a negative outlook on all the ratings, reflecting continuing uncertainty over the impact of reduced crude production and exports from Venezuela on CITGO's operations and working capital needs, and the possibility that future actions by CITGO to undertake additional secured financings could result in the notching down of its senior unsecured ratings. The rating agency notes that PDV America Inc. continues to be rated Caa1 with a developing outlook.

CITGO's recent financings increase the likelihood that dividends will be available to retire at least a portion of PDV America's $500 million senior notes at maturity. However, the dividend will be subject to CITGO's own liquidity needs, and PDVSA's other cash sources to retire PDV America's debt are uncertain at this time.

CITGO Petroleum Corporation is headquartered in Tulsa, Oklahoma.

reuters.com Thu February 27, 2003 03:57 PM ET By Pascal Fletcher

CARACAS, Venezuela, Feb 27 (Reuters) - An opposition strike against President Hugo Chavez has cost Venezuela's oil-reliant economy an estimated $7.6 billion in lost production and fiscal revenues, inflicting severe, long-term damage, the Finance Ministry said.

In a grim report on what it called the strike's "economic sabotage," the ministry said the stoppage that began Dec. 2 and fizzled out early this month had also closed down businesses, caused shortages of goods, hiked prices, reduced salaries and destroyed jobs.

"The damages caused are severe and long-term ... they will permanently affect the whole population," said the report by Finance Minister Tobias Nobrega, which reviewed the 2002 year but included a summary of the effects of the strike.

The report was sent to Reuters in Caracas on Thursday.

The strike, called to try to force left-winger Chavez to resign and hold early elections, sharply cut back oil production and shipments by the world's No. 5 oil exporter, forcing the government to slash spending and introduce foreign exchange and price controls earlier this month.

Nobrega's report estimated total loss of production in the economy caused by the strike at 9.9 trillion bolivars ($6.2 billion using the government's fixed exchange rate of 1,600 bolivars to the U.S. dollar that was introduced Feb. 6).

Of this lost production, 4.3 trillion bolivars ($2.7 billion) corresponded to the oil sector and 5.6 trillion bolivars ($3.5 billion) to the non-oil sector.

In addition, loss of fiscal income for the government as a result of the strike was estimated at 2.2 trillion bolivars ($1.4 billion). Oil exports normally account for around half of total government revenues.

BLEAK RECOVERY PROSPECTS

The effects of the strike are still being felt in the strategic oil sector, where the government has sacked more than 13,000 striking employees of the state oil giant PDVSA. It says it has restored oil output to just over 2 million barrels per day (bpd), about two-thirds of pre-strike levels.

Oil strikers put output at around 1.58 million bpd.

Energy Minister Rafael Ramirez said in Washington on Thursday the government hoped production would be approaching its pre-strike level of 3.1 million bpd by the end of March.

Condemning the strike as an "act of economic irrationality," Nobrega's report said its impact would severely constrain Venezuela's recovery prospects in 2003.

The economy shrank 8.9 percent in 2002, according to the government. Economists and analysts polled by Reuters this month predicted a sharper contraction this year of more than 13 percent. The poll saw inflation rising to 42.8 percent in 2003 from 31.2 percent last year.

Negotiations between Chavez's government and its political opponents have so far failed to produce an agreement on early elections to solve the long-running and often violent feud that has shattered investor confidence in Venezuela.

Tensions have risen again this month after authorities last week arrested one of the alleged strike leaders, business chief Carlos Fernandez. He is under house arrest facing rebellion charges and arrest orders have been issued for other alleged ringleaders of the opposition stoppage.

Bomb blasts badly damaged Spanish and Colombian diplomatic buildings in Caracas early on Tuesday after Chavez accused Spain, Colombia and the United States of meddling in his country's political crisis.

Citing a deterioration in the political climate, investment banks Merril Lynch and Credit Suisse First Boston this week downgraded their recommendations on Venezuelan sovereign bonds.

The Finance Ministry report said Venezuela's foreign debt at the end of 2002 stood at $22.3 billion, a 1.16 percent decrease from the previous year.

news.ft.com By Carola Hoyos Published: February 27 2003 19:29 | Last Updated: February 27 2003 22:58

Crude oil prices surged on Thursday to almost $40 a barrel in New York, a high not seen since just after Iraq invaded Kuwait in 1990. The $2 jump was fueled by concerns over a lack of US oil supplies ahead of an increasingly inevitable war with Iraq.

The jump, which affected the US benchmark West Texas Intermediate contract far more than its Brent Light London counterpart, proved short-lived, however, with prices retreating to the $37 range by the early-afternoon. One trader described the morning session as one of the “wildest rides” the energy futures market had seen in years.

Commercial stockpiles of US crude oil are smaller than they have been since 1976 and in the past week fell to the minimum 270m barrels needed to keep the US’s vast system of refineries, pipelines and storage tanks running smoothly.

Meanwhile, a cold winter gripping the US Northeast has cut stored heating oil to dangerously low levels, more than 30 per cent below the inventories available last year.

Washington has tried in vain to calm the recent jitters in the oil market by announcing that it would consider in case of a war with Iraq to release some of the 600m barrels of crude oil it stores for emergencies.

The Opec oil cartel has also tried to reassure markets, raising its output quota in January and promising to use spare capacity to cover a possible reduction of 2m barrel a day from Iraqi exports in the event of US military action in Iraq.

But the world faces supply interruptions not only from the Middle East.

George Beranek, analyst at PFC Energy, a consulting firm in Washington, says: “Invetories are low enough that the market really is working without a safety net, particularly in the US. If you have renewed problem in Venezuela or problems in  Nigeria in the run up to their April presidential elections, then you are going to have a serious problem very quickly.”     

The effect of the high oil price on the world economy will largely depend on the length of time it continues at current levels. For many countries, a major mitigating factor has been the recent drop in the value of the dollar, the currency in which oil is traded.   

“The real problem comes if these problems last a long time. One month should not be a problem, three months will have an impact in developing economies and 6-12 months it could be serious,” Mr Beranek says.

On the down side, the release of extra Opec crude and stockpiles held in storage in Europe, Japan and the US could also swamp the market. Prices could drop to well below $20 a barrel if a short war in Iraq causes little damage to the country’s oil fields and the worries about oil supply interruptions in countries such as Venezuela and Nigeria prove unfounded.  

Posted: Thursday, February 27, 2003 By: Patrick J. O'Donoghue

The Inter American Human Rights Court (IAHRC) has stated that the Venezuelan State has not fully complied with the provisional measures the Court issued on November 27 to protect the lives of Luis Enrique Uzcategui (Falcon), 8 Cofavic defense attorneys (Liliana Ortega, Yris Medina Cova, Hilda Paez, Maritza Romero, Aura Liscano, Alicia de Gonzalez and Carmen Alicia Mendoza) and 5 Radio Caracas TV (RCTV).

• The Court has given the Venezuelan government until March 22 to reply.

State representative, Jorge Duarte has replied that in the case of Cofavic, the State has expressed concern for their safety and the basic problem has been one of implementation delayed by "disorder and interruptions proper to the bureaucratic nature of the State nad Venezuelan idiosyncracy."