Ortega: 'We have acted with tolerance and patience' Tuesday, December 31, 2002 Posted: 1818 GMT

CARACAS, Venezuela (AP) -- Street violence in Venezuela is becoming increasingly unavoidable, a key leader in the strike to topple President Hugo Chavez warned Tuesday, as the monthlong protest continued choking gasoline supplies and polarizing residents.

Labor leader Carlos Ortega also renewed his call on Venezuelans to stop paying taxes, a move that would widen a strike that already has roiled world oil markets and paralyzed industry and caused food shortages throughout the country.

"The repudiation that Venezuelans have for the current regime can take us at any given moment to a violent situation and the sacrifice of human lives," Ortega, president of the country's largest labor confederation, told Globovision television. "We have acted with tolerance and patience to avoid being provoked."

On Monday, clashes erupted between Chavez opponents and supporters in several regions of Venezuela, while the strike helped push oil prices to two-year highs. The government acknowledged production at its wells won't return to normal for weeks.

Oil minister Rafael Ramirez insisted that Venezuela, the world's fifth largest oil exporter, could restore "all operations within a month." But striking executives at the state oil monopoly, Petroleos de Venezuela S.A, said Monday that would be impossible, even with replacements of field crews, executives, tanker crews and dockhands.

Ramirez claimed that oil production was up to 600,000 and 700,000 barrels a day and would reach 1.2 million barrels a day next week. Still, he acknowledged the strike had already cost $2 billion in lost oil revenue and damage to oil installations.

The oil industry represents 30 percent of Venezuela's $100 billion gross domestic product.

Venezuela's opposition called the strike to force Chavez to call a February 2 nonbinding referendum on his presidency, which runs to 2007. Strike leaders hope a poor showing will increase pressure on Chavez to resign.

Opponents blame the president for an economic downturn of 7 percent in 2002, annual inflation surpassing 30 percent, 17-percent unemployment and chronic political unrest. They charge that Chavez is trying to impose a leftist, authoritarian government.

Chavez counters his adversaries are trying to mount an "economic coup" and that Venezuela's constitution allows a binding referendum on his presidency next August.

To ease the oil shortage, Trinidad said it would soon begin shipping 300,000 barrels a day to Venezuela. The crisis, plus the threat of U.S. war in Iraq, sent crude futures soaring Monday, though they eventually settled lower on talk of an output increase from the Organization of Petroleum Exporting Countries. (Full story)

Oil prices reached a two-year high of $33.65 in New York before settling back to $31.37. The U.S. Energy Department reported Monday that the average retail price of unleaded gasoline rose 4 cents last week to $1.44 per gallon. The average price at the pump has gone up 8 cents in the past two weeks.

"It is pretty much as it has been for the past month -- the two driving factors being Iraq and Venezuela," said Orrin Middleton, an oil analyst at Barclays Capital.

Police used tear gas Monday to separate opposition protesters and Chavez supporters outside the state oil monopoly's headquarters in Maracaibo, the hub of the country's oil-producing West. No injuries were reported.

Secret police arrested National Guard Gen. Carlos Alfonso Martinez, among the dozens of soldiers who have occupied a Caracas city square for three months in rebellion against Chavez. The arrest sparked protests and a rock fight between demonstrators and civilian Chavez supporters that injured 10 people, said city Fire Chief Rodolfo Briceno.

— By Patrick Markey

CARACAS, Venezuela (Reuters) - Venezuelans prepared for New Year celebrations marked by sharp political conflict on Tuesday as an opposition strike to force President Hugo Chavez to resign stretched into its fifth week.

Strike leaders from political parties, unions, business groups and state oil firm PDVSA appeared determined to hold their ground until Chavez quit and called elections in the world's No. 5 oil exporter.

The stoppage, started on Dec. 2, has battered the country's strategic oil sector, rattled energy markets and stoked fears of violent clashes over the rule of the former paratrooper whose leftist reforms have riled his foes.

Police fired tear gas to disperse government and opposition sympathizers Monday after they clashed briefly. Tensions flared again later in Caracas when police detained a dissident general who has urged popular resistance against Chavez.

After a Christmas marred by political rancor and domestic gas shortages, Venezuelans appeared ready to make the most of year-end festivities with their Andean nation still caught in a tense deadlock.

"We came out to play and help people forget a little," said Juan Gil, a musician strumming a guitar on a central Caracas street. "Sure there are problems, but we have to celebrate."

Chavez, who led a botched coup six years before his 1998 election, has rejected calls to step down. He says he is steadily defeating foes he portrays as "rich elites" who want to topple him by destroying the petroleum industry.

But opponents of his self-styled, populist "revolution" have kept up their daily campaign of criticism, accusing him of economic mismanagement, dictatorial rule and of trying to install a Cuba-style communist state.

FIGHTING WORDS OVER OIL SECTOR

Since Chavez survived a short-lived coup in April, his popularity has slipped. However, he maintains support among poorer voters who say his reforms, such as easy credits and land reform, have addressed rife inequality.

Vowing to defeat the strikers, Chavez has sacked dissident oil executives and replaced protesting oil workers with strike-breaking crews. He says oil production will soon return to normal levels.

Still, Venezuela, where gasoline costs less than mineral water, has been forced to import fuel to cope with dwindling domestic supplies. Many motorists in the capital spent their Christmas scouring the city for gasoline.

Attempts by the Organization of American States to end the political standoff have so far failed. The opposition demands a date for elections in the next three months and have urged Chavez to agree to a nonbinding referendum on Feb. 2.

But the president rejects early elections and says the constitution only allows a binding referendum on his mandate in August, halfway though his current term. Elections are due at the end of 2006.

By NEELA BANERJEE

n an effort to restrain oil prices, which have reached their highest levels in two years, the Organization of the Petroleum Exporting Countries is considering increasing production by 500,000 barrels a day in the next two weeks or so, a senior OPEC delegate said yesterday.

Reports of the potential move helped lead to a 4.1 percent decline in the commodity price of crude oil. In New York, oil for February delivery fell $1.35 yesterday, to $31.37 a barrel. Earlier in the day, the price soared to $33.65, the highest point in two years. Prices for gasoline and heating oil fell as well.

But traders cautioned that the decrease might not be part of a trend. The OPEC members that have the spare capacity to produce additional crude oil are in the Persian Gulf region, and it generally takes 40 to 50 days for oil from there to arrive in the United States. That may be too long a wait to compensate for the cutbacks in oil that have been caused by a general strike in Venezuela, and prices may soon rebound, industry analysts and traders warned.

"People started to take profits when the OPEC news came out," said Philip J. Flynn, senior market analyst for Alaron, a Chicago futures-trading firm. "The market was ready to move down anyway. People were looking for an excuse to sell off. Nothing fundamentally has changed, even if OPEC raises production, because it will take five or six weeks for the oil to get here."

OPEC has a system called the price-band mechanism that calls on members to confer and explore changing production limits if prices for a group of different crude oils fall below $22 a barrel or rise above $28 a barrel for 20 consecutive trading days. The organization was quick to reduce production by 500,000 barrels a day when prices lagged, though it has been reluctant in the past to increase production by similar quantities when prices rose.

But oil prices have been above $28 a barrel for about two weeks now, and OPEC members are nervous that the high prices will curtail global demand. There is usually a lag of a few weeks between a rise in crude oil prices and a commensurate increase in the retail prices of fuels like gasoline and heating oil. And those prices, too, jumped sharply last week.

"OPEC is watching prices closely," said the senior delegate, who spoke on the condition of anonymity. "They don't like it to go above $28. OPEC has a commitment not to allow a shortage to take place."

OPEC now pumps 23 million barrels a day, though industry analysts contend that members produce above their official quotas to take advantage of high prices. OPEC members are supposed to reduce their overproduction tomorrow, but "no one has really cut, given the situation in Venezuela," said Gary N. Ross, chief executive of the PIRA Energy Group, a New York consulting firm.

The four-week strike in Venezuela against the government of President Hugo Chávez has virtually brought the oil industry there to a standstill and reduced exports to a trickle. Venezuela is the fourth-largest exporter of oil to the United States, accounting for about 14 percent of this country's imports.

Venezuelan officials said they had taken steps to revive production, but oil traders said they remained skeptical.

The OPEC disclosure may not salve the overheated oil market in the near term, but the member nations' oil will be needed if the standoff in Venezuela between opponents and supporters of Mr. Chávez drags on, as it appears likely to do, Mr. Ross said. "They're trying to jawbone a bit to get the price down now," he said, adding, "Even 45 days from now the market may still need the oil, with the Venezuelan situation and what might come with Iraq."

Besides the long wait for oil from the Persian Gulf, replacing Venezuelan oil may be complicated by the kind of oil that is now available. Some types of Venezuelan crude oil are very "heavy," or viscous, and such oil, the OPEC delegate said, might not be readily available in the quantities that United States refiners need. Several refineries in the United States and two large ones in the Caribbean that supply this country have sharply reduced their output because of the shortage of Venezuelan crude oil.

Mr. Ross pointed out, however, that those refineries could use a different grade of crude oil, though they would not run as efficiently. And they may be able to increase output again, he added.

The American Petroleum Institute is expected to release its weekly oil storage data today, which would give the markets a clearer sense of the effect of the Venezuelan situation. Traders said they expected stocks of crude oil and petroleum products to be considerably lower than the week before. Mr. Ross estimated that refiners had about 20 days' worth of supplies at the current pace of oil processing.

"When the A.P.I. data come out this week," Mr. Flynn said, "I think the market will get a nice big slap in the face."

Natural Gas Prices Fall By Bloomberg News

Natural gas futures tumbled yesterday to the lowest level in more than two weeks on expectations that warmer weather early next month in much of the central and eastern United States would curb demand.

Temperatures in the Midwest and Northeast are expected to be above normal from Saturday through Jan. 8, according to the National Weather Service's latest 6-to-10 day forecast. Higher temperatures signal reduced heating use and will probably extend a recent decline in gas futures, traders said. Prices fell 3.8 percent last week.

In New York, gas for February delivery fell 22.2 cents yesterday, or 4.4 percent, to $4.80 a million British thermal units, the lowest close since Dec. 11. Prices were still up 14 percent this month and 87 percent this year.

Venezuela Strife Pushes Crude Oil to $30

The general strike in Venezuela is causing problems at a New Brunswick power plant that gets its specialized fuel from the South American country.

Much of the world looks to Venezuela for some of its oil supply, and New Brunswick is no exception. Venezuela provides NB Power with orimulsion fuel, which is a key element in the generation of the province's electricity.

The Dalhousie plant in northern New Brunswick currently relies on orimulsion fuel. NB Power's Coleson Cove plant plans to start burning the fuel in 2004.

With Venezuela's strike entering its fourth week, the Dalhousie generating plant's supply is running low. Venezuela is the world's only supplier of orimulsion fuel.

The New Brunswick conservation council is urging the province to reduce its dependence on foreign sources.

"The whole basis of the decision to go to orimulsion at the power plant was that the State Oil Company of Venezuela was giving NB Power a fixed price contract for 20 years or more," council policy director David Coon told ATV News. "Given the current political unrest all bets are off."

NB Power says the use of orimulsion fuel at the Dalhousie plant and the conversion of the Coleson Cove plant could save province residents millions of dollars annually. However, with the fuel of choice in short supply, the plants need to consider alternatives.

"We're trying to provide stable and competitive prices in the province of New Brunswick, and ways we have to do that is to try to find fuels that are not only as inexpensive as orimulsion is, but to find fuels that can make the world cleaner," NB Power's director of public affairs Bob Scott said.

This will be the first time in nine years that NB Power's orimulsion supply has been interrupted. The Dalhousie plant may have to resort to burning a heaver crude oil, which is more expensive with less favourable emissions.

REFLEXION SOBRE MILITARES Y POLÍTICOS

Los calificativos, las críticas y los juicios de valor sobre el Presidente son tan válidos que justificarían su salida por cualquier vía, menos por la del magnicidio, tan implorada por él quizás para librarse del calvario que le espera. Sin embargo, la Coordinadora Democrática se mantiene inalterable en plantear que la salida a la crisis tiene que ser negociada, pacífica, constitucional y electoral. Con ese propósito está en la mesa de negociaciones y acuerdos, o de diálogo según el gobierno, bajo la dirección del doctor Gaviria. Tímidamente añade al planteamiento electoral la renuncia del Presidente. Para algunos sectores, Plaza Altamira por ejemplo, el esquema debería ser renuncia primero y elecciones después. Para la Coordinadora la salida del Presidente pasa por el referéndum consultivo, o el revocatorio, o el adelanto pactado de una elección general, o una enmienda constitucional para acortar el período y elegir rápidamente, o una nueva Asamblea Constituyente para destituirlo, designar un gobierno provisional e ir a elecciones generales en un lapso razonable. No hay un solo planteamiento que unifique todos los criterios opositores perdiendo mientras el país se desmorona, la rabia se multiplica y la tentación de la violencia crece en la calle. Por su parte el Presidente no negocia, no acepta nada, retadoramente se burla de todo y de todos y trabaja para imponerse sobre los escombros de Venezuela. Para cualquiera de las salidas planteadas por la oposición se necesitan instituciones que funcionen y un Presidente que acepte y haga cumplir los acuerdos y decisiones. Los dos supuestos son inexistentes, pero se insiste en los imposibles. Todos sabemos que de Chávez no se saldrá sin una verdadera insurrección popular acompañada por una intervención militar eficiente que liquide la tragicomedia. El problema es que unos lo ven venir y lo desean, otros viéndolo lo rechazan aunque resignadamente y algunos trabajan activamente para que no llegue a ocurrir. Prefieren jugar a la política con Chávez. Mientras la salida sea “negociada, constitucional, pacífica y electoral”, los militares sobran como parte de la solución y en su mayoría, de acuerdo o no con el proyecto chavista, pasivamente le darán soporte institucional.

En Venezuela está amenazada la libertad, la democracia y la vida misma. Los derechos fundamentales, la soberanía y la integridad de la República. Hemos respetado a la Fuerza Armada como guardián de lo permanente. Mantener a Chávez en el poder o permanecer neutrales es una traición al juramento hecho de sostener y defender las instituciones democráticas. Éste no es un pleito político tradicional entre partidos. La independencia de Venezuela peligra en manos de un títere accionado desde afuera como parte de un proyecto revolucionario contrario al interés nacional. Dios y la Patria los condenarán por y para siempre si la traición se consuma.

Oswaldo Alvarez Paz Lunes, 30 de diciembre de 2002