Turmoil brings Venezuela to standstill - Foreign companies pull out or lie low - Microsoft, Ford, fast-food chains close. Some staffs sent home for safety

www.ohio.com Posted on Wed, Jan. 22, 2003 From Beacon Journal wire services

CARACAS, VENEZUELA - Fearing their workers are in danger from Venezuela's political violence, many multinational companies are sending them home or suspending operations, or both.

Microsoft Corp. closed two Venezuela offices Monday, saying it could not guarantee employees' safety. The company employs about 85 in Caracas and six in the western city of Maracaibo.

Since Venezuela's opposition called a strike Dec. 2 aimed at ousting President Hugo Chavez, oil companies such as ConocoPhillips and France's TotalFinaElf have withdrawn nonessential expatriate staff. Some fast-food franchises such as McDonald's, Burger King, Wendy's and Subway have closed.

The number of companies and workers involved isn't known, but departures accelerated after the U.S. Embassy and other missions issued strong safety warnings in December. The U.S. Embassy sent off its nonessential staff and closed its commercial attache's office.

The strike has reduced the nation's oil output and contributed to a surge in global oil prices to two-year highs. Crude oil for February delivery rose 70 cents, or 2.1 percent, to $34.61 a barrel on the New York Mercantile Exchange, the highest closing price since Nov. 29, 2000. Prices rose as high as $35.20 a barrel in the last 15 minutes of trading.

Venezuela was producing about 3 million barrels a day before the strike began Dec. 2; the Lake Maracaibo port produced 1.7 million barrels of that. Current production nationwide is about 1 million barrels a day, according to the government, or about 650,000 barrels a day, according to strikers.

Dozens of Venezuelans have been killed in political violence since an April coup briefly toppled Chavez. Six have been killed since the strike began.

None of the companies has announced it is withdrawing for good. Venezuela is the world's fifth-largest exporter of crude, and it has accumulated $20 billion in investment in its natural gas, oil and oil-related-services sector in the past 10 years.

I think (oil companies) are assessing the situation and trying to stay as invisible as possible,'' said Larry Goldstein, president of the New York-based Petroleum Research Foundation. Politically, they don't want to be seen as choosing sides right now. Some have substantial investments they have to protect.''

Many local workers are striking, and others can't get to work because of gasoline shortages. Political protests occur daily and often end in violence. Financial transactions can be hard to complete because Venezuelan banks are operating only three hours a day.

Ricardo Tinoco, a spokesman for Ford Motor Co. in Venezuela, said operations have been suspended since early December. He said all employees were told to come back next week. ``But in light of the current situation, the lack of fuel and the fact that many of our suppliers are on strike, we don't see how we'll be able to start operations next week as planned,'' he said.

Ford has a large assembly plant in Valencia, 70 miles west of Caracas.

On Friday, Venezuela's military raided a Coca-Cola affiliate bottler and another bottler belonging to Venezuela's largest food and drinks producer, Empresas Polar. Both companies denied hoarding goods.

The Venezuelan American Chamber of Commerce condemned the raids as ``a grave rupture of the state of law.'' It warned more than 1,000 affiliates that the army could commit more abuses and urged the affiliates to report violations.