Venezuela's Sidor Says It Has 40% Of Gas Needs

sg.biz.yahoo.com Saturday February 1, 3:59 AM

CARACAS -(Dow Jones)- Venezuelan steel maker Siderurgica del Orinoco CA, or Sidor, said Friday that it's ready to resume full production as soon as its gas supply is restored from the current 40% of requirements.

The company said in a press release it's currently just operating its hot and cold lamination plants, after an ongoing 61-day-old general strike brought Venezuela's vital oil industry to a near standstill, severely affecting gas production, which is byproduct of crude oil extraction.

Oil output is now back to about a third of roughly 3 million barrels a day before the strike began.

Although many businesses have reopened, opposition leaders have said they won't officially call off the two-month-old strike unless President Hugo Chavez agrees to early elections.

Chavez has said his detractors must avail themselves of constitutionally-approved measures, such as an amendment shortening his term or a possible recall referendum in August, the midpoint of his term.

Chavez's critics blame his left-leaning policies for the country's deepening economic crisis, as the economy likely contracted about 8% last year amid unemployment of 17% and inflation of 31% sparked by the bolivar's devaluation. The currency lost another 25% this year before the government halted sales of foreign exchange Jan. 22 ahead of anticipated measures to stop capital flight and stabilize the bolivar.

Chavez, first elected in 1998 on promises to eradicate corruption and inequality, has blamed the recession on an "economic coup" by his opponents.

Venezuela's government last year capitalized $350 million of a $700 million debt Sidor had with the state-owned Bandes investment bank, raising the country's stake to 42% from 30%.

State-owned until 1998, Sidor is now semiprivate, with the remainder owned by the Amazonia consortium, which is made up of Mexico's Hylsamex SA (HLEFTY), Argentina's Siderar SA (E.SDR), Venezuela's Sivensa (E.SVS),and Brazil's Usiminas SA (E.UUS).

-By Jehan Senaratna, Dow Jones Newswires; 58212 564 1339; jehan.senaratna@dowjones.com