Venezuela Alleges Oil Sabotage

asia.reuters.com Sun January 12, 2003 05:41 PM ET By Tom Ashby

VIENNA (Reuters) - Embattled Venezuelan officials on Sunday accused striking oil workers of sabotaging the country's energy industry, while assuring fellow OPEC states the government would restore output swiftly.

State oil company chief Ali Rodriguez said he would start criminal prosecutions against workers he said had sabotaged oilfields, refineries and computer systems during the six-week-old strike that has brought the industry to its knees.

"There are criminal and civil cases to answer in this and of course we will apply the law in Venezuela," Rodriguez told a press conference after an OPEC meeting in the Austrian capital.

Striking executives of Petroleos de Venezuela, many of whom have now been sacked by Rodriguez, say incompetence by replacement workers is to blame for a recent spate of accidents, including oil spills in the western Lake Maracaibo.

The Organization of the Petroleum Exporting Countries met on Sunday in emergency session to deal with the Venezuelan stoppage, lifting quotas by 1.5 million barrels a day, seven percent.

In response to Venezuelan assurances that output would resume swiftly, OPEC included the South American country in the production hike despite its current inability to fill its quota.

OPEC President Abdullah al-Attiyah said OPEC was hopeful that Venezuela would return to full production soon and said the other cartel members would reverse the hike when that happened.

OUTPUT SLUMP

Opposition oil executives said output fell below half a million barrels per day last week, from more than three million in November. Government officials peg it closer to a million.

"Internal market distribution is being normalized, we have managed to free up port operations and we have drawn down stocks whose build-up had blocked production," Rodriguez said.

"This has helped a sustained rise in output, so this month we should achieve our objectives."

Oil Minister Rafael Ramirez said oil output should rise to two million barrels per day by the end of January and 2.5 million by mid-February.

Asked if Venezuela would pump its full 2.8 million bpd quota by the end of February, Rodriguez replied: "Not totally because damage has been very great and we don't know if there has been sabotage in some wells, so we have to be very careful."

The government has repeatedly failed to meet previous deadlines for restarting the industry, and still faces a major obstacle from a crashed central computer system. Striking workers say Venezuela will take months to get back to quota. "There has been electronic sabotage and sabotage on valves because the campaign is aimed at causing accidents, and we have to take anti-sabotage measures to start up safely," said Rodriguez, a former OPEC secretary-general.

The United States welcomed OPEC's big output hike, having lost some 13 percent of its imports from Venezuela.

The country's main oil refineries have ground to a virtual halt, export terminals have drastically reduced loadings and long lines have formed at gasoline stations, while Venezuela resorts to importing fuel.

Rodriguez said the small El Palito refinery was now being started again after a seal blew in last week's attempt to restore the flow of refined products to the domestic market. Rodriguez said the country's largest refinery complex at Amuay-Cardon had been shut down incorrectly by striking workers, leaving deposits of asphalt and sulphur in some units.

Nevertheless, he said operations there would resume in two or three weeks.

"Our objective is to re-establish basic production this month and restart the refineries to satisfy the internal market because we are importing gasoline at prices far above what we sell it at, which is creating losses for the company," Rodriguez said.