Venezuela Oil Output Rises Despite Strike

abcnews.go.com Jan. 26

— CARACAS, Venezuela/PORTO ALEGRE, Brazil (Reuters) - Venezuelan oil output extended a two-week recovery on Sunday, despite a lengthy opposition strike crippling the world's fifth largest oil exporter, government and opposition officials said.

The two sides disagree over the extent of the recovery, but both confirm a sharp rise from a low of 150,000 barrels per day (bpd) at the depth of the eight-week-old strike.

Anti-government strikers said crude flows rose to 986,000 bpd on Sunday, 30 percent of pre-strike levels, while President Hugo Chavez said the production reached 1.32 million, 40 percent of normal.

"We have been recovering our production levels very fast," Energy and Mines Minister Rafael Ramirez told reporters on a visit with Chavez to Brazil. "In the first quarter we will stabilize our production until we reach the new OPEC quota, which is 2.8 million barrels per day."

Venezuela's strategic oil industry is the focus of a bitter political conflict in the OPEC member country.

The strike, mounted by opponents to Chavez who want new elections, has brought the country to the brink of economic collapse, helped drive world oil prices to two-year highs, and drained U.S. stockpiles as Washington prepares for possible war on Iraq.

The government blames strikers for sabotaging oil wells, pipelines and ports, causing a recent spate of oil spills and refinery fires. Dissident workers say they left the installations in good working order and blame incompetent strike-breakers for the damage.

"A good proportion of the crude being produced, more than 300,000 bpd, is not sustainable because it has not been sold on the market so it should not mean higher exports," the strikers said in a daily report on the industry.

Most foreign ship owners are staying away from Venezuela, amid the risks of sabotage in the ports and ship agent warnings that terminals are run by staff without the necessary certification to handle oil and gas.

Exports last week rose to 688,000 bpd, still only 25 percent of pre-strike levels, according to ship agents and port authorities.

Chavez, who has repeatedly failed to achieve previous targets, said output would reach 2.6 million bpd within one month to six weeks.

Some oil refineries have been partially restarted by troops, foreign engineers and unemployed or retired workers, but the opposition sees serious operating problems, and long lines of cars stretch outside the few gasoline stations offering fuel.

Chavez was visiting Porto Alegre to attend a demonstration in support of his besieged government at the World Social Forum, a meeting of leftist intellectuals and nongovernmental groups designed as an alternative to the World Economic Forum, a meeting of global power brokers under way in Switzerland.