Daily International News Review, Venezuela

www.11abril.com February 14, 2003 Alexandra Beech New York 14 de February del 2003

Good day,

Venezuela disappeared from the international news radar, except for a front page article on the Wall Street Journal. The wires and papers ignored the country, on the day after that the National Assembly approved the text of a historic measure, the Law of Social Responsibility for Radio and Television, which is the first step towards the systematic censure of the country's media. While the law has yet to be passed, the government's party dominated National Assembly will now begin the next phase of debating its articles. (The country's telecommunications regulatory agency, Conatel, already ordered Globovision, a 24 hour news channel, to begin airing three hours of children's programming per day, between 3 and 8 pm. The channel refuses, saying that being obligated to change its format would violate article 58 of the Constitution, which states that all persons have the right to receive opportune information). Another important item missed by international news is that yesterday, 597 more PDVSA workers were fired, bringing the total to a whopping 12,400 out of an initial 40,000.

The Wall Street Journal reports that "Venezuela's oil industry is expected to remain hobbled indefinitely even after the current strike is settled", which "could leave global petroleum markets vulnerable in the event of war with Iraq and increase the prospect of further gasoline-price increases." It poses that production levels will not exceed 2 million bpd this year, "hindered by a lack of experienced employees and managers." Analysts place current production at 1.4 million barrels per day, largely ignoring Chavez's 1.9 figure. Our contacts in the field estimate that oil production will level off at 1.5 million barrels per day. In addition, the Journal reports that "Venezuela has permanently lost as much as 400,000 barrels a day, or more than 10% of its total output," as low-pressure wells fill with sand, older wells need maintenance, and "Venezuela's signature heavy petroleum, meanwhile, tends to congeal when shut down and may take months to get flowing again."

Meanwhile, "storage bottlenecks have prevented heavy-oil joint ventures from resuming production." While Exxon said it planned to load synthetic crude, "Sincor, an extra-heavy-oil operation shared by TotalFinaElf SA, Statoil ASA and Petroleos de Venezuela, said it may resume production in weeks, but that depends on whether the venture can get enough natural gas to break down the heavy petroleum and make it usable in U.S. Gulf Coast refineries." Natural gas has been scarce since the beginning of the strike. Charles Beech, a local contractor, told me: "that was the key: shut down gas production and refineries automatically shut themselves down, as automated safety measures are self implemented by these state of the art facilities." In addition, he says that "PDVSA as of yesterday was compressing 4598 million cubic feet of gas daily, it´s normal pre-strike levels were 9400 million cubic feet per day, therefore they are 49% to pre-strike levels." Moreover, the Journal reports the "problems are compounded by a natural production-decline rate across the industry of 20% a year, which is particularly steep." Mr. Beech says that "as natural flowing well formations are over produced, reservoir pressures will start to decline, especially in the north Monagas fields which have accounted for most of the production increases in Venezuela. " In many of these wells," he continues, "we have information that chokes have been removed, and are presently producing at their maximum capacity." Chokes are implemented as a mechanism of preventing the over-production of a well, guaranteeing a longer and more productive life for the formation. Moreover, workers hired during the strike lack knowledge of the wells, "especially those that require technical expertise to force oil to the surface."

In addition, "Venezuela's failure to restore normal operations at its five refineries has created severe domestic gasoline shortages that have led the country to buy the fuel from Europe and the U.S. -- gasoline that normally would be produced and stored to prepare for the U.S. summer driving season. In the past month, Venezuela, normally a gasoline exporter, has purchased more than 12 million barrels of gasoline, some of which is still due to arrive," according to the Journal. Lifting the strike in other sectors actually helped the opposition, as an increase in domestic gasoline demand has created further social discontent and increased pressure on the government to negotiate for early elections.

The Venezuelan benchmark DCB's are currently trading at 69(bid) and 69.14 (ask) for a bid spread of 1,865 basis points, lagging the market.

In local news, The dean of the Central University of Venezuela (Universidad Central de Venezuela), said in Thursday that Ricardo Sánchez, an 18 year old student at the School of International Studies, was arrested and tortured by the government's secret police (Disip) after participating in a protest against Chavez.

The president of the new foreign exchange commission, Edgar Hernández, said that requests for dollars will take 3-4 days, with a maximum of 45 days. Only those who are registered with the Seniat (tax collection agency) or in the National Institute of Statistics will be able to buy foreign currency. He added that only 317 exporters out of 1000 are included in the Seniat registers. Finally, he announced the creation of a Penal Law on Foreign Exchange Crimes, which will delineate "sanctions against those who violate the exchange controls system."

A US congressional committee is expected to visit Venezuela from February 14-16. The delegation, which includes Chavez's friend, Cass Ballenger (North Carolina republican); William Delahunt (Massachusetts democrat) and Gregory Meeks (New York democrat), are seeking ways to "contribute to the search for accords in the Venezuelan political process." I don't expect much to come from this initiative, as Cass Ballenger has normally kow-towed to the president. Still, I hope that the delegation also meets with opposition leaders.

Commentary Where does Venezuela's domestic problem become problematic for the United States? For several reasons. Despite Opec's production increases to offset Venezuelan's decreased output, "U.S. oil inventories have plummeted to 269.8 million barrels, their lowest level since 1975, according to the U.S. Energy Information Agency." The low US stocks, compounded with fears over war "have helped send the price of petroleum soaring, with the U.S. benchmark surging to $36.36 a barrel Thursday, up 59 cents, in trading on the New York Mercantile Exchange." Therefore, "U.S. average pump prices, which climbed eight cents to $1.61 a gallon for regular grade last week, have risen 16 cents since the beginning of the year." Higher gasoline prices means higher inflation, at a time when the United States is facing an economic slump. Furthermore, let's be clear that Venezuela is only producing around 1.3-1.4 million barrels per day, and part of that is used domestically. If the US were to go to war with Iraq, and supplies from the Middle East were threatened, Venezuela could not guarantee an amply supply of oil to the United States, regardless of what the government claims. Therefore, if Bush pursues a war strategy, the Venezuelan crisis could become a US crisis. Furthermore, as more and more Venezuelans face unemployment, insecurity, and the threat of violence, they will head north or east looking for stability. The US, particularly Florida officials, warmly received the first wave of Venezuelan immigrants, as upper middle class Venezuelans deposited their dollars in local banks and invested them in local industry, prompting Weston officials to joke that the city was planning to erect a bust of Chavez in the town square to thank him for so much wealth. While the recently fired PDVSA engineers, scientists, managers, and technicians will likely head to the US and Europe looking for work, and will compete with highly qualified domestic professionals for the precious jobs available in the white collar market, their percentage is small. The big wave of immigrants will be desperate for any jobs available in the already suffering economy. Many won't come by plane with visas, but in ships, concealed in containers. This is the sad but dramatic truth. Once on US land, with escalating violence in Venezuela, it will be perceived as a human rights violation, NOT to grant them exile. Therefore, US officials should consider the Venezuelan problem as a US problem, for oil and immigration issues.

Opinion Today's opinion, "Venezuela is shaping up as "elected dictatorship"" is by the influential Miami Herald columnist Andres Oppenheimer, who argues that "Chávez may use focus on Iraq to crack down on private media". In fact, while the opinion piece is way behind the curve, he is still the first US columnist to openly use the concept of "dictatorship". In addition, I'd like to draw your attention to an important piece by Stephen Johnson at the Heritage Foundation, who argues: "The only way to rescue Venezuela's viability as an energy producer and trade partner is to help restore democracy by bringing sustained pressure on President Hugo Chávez to allow a peaceful, constitutional vote on his mandate and then supervise the resulting campaign and vote to safeguard political and civil liberties until the Venezuelan government is able to do so itself." The article is available at www.heritage.org.

E-mails I've also included an e-mail (in Spanish) at the end, written by a PDVSA worker from La Campina, the World Corporate headquarters of PDVSA, located in Caracas. It describes the National Guard's treatment of the workers, how their personal belongings disappear or are placed in boxes, as soldiers scream at those who wander through. It is a sad read for those whose family and loved ones love the oil industry and PDVSA, but necessary for those following the crisis.

Events February 22 is The World Day of Prayer for Venezuela. Venezuelans from New York, New Jersey, and Connecticut are invited to the Holy Family Church (315 E. 47 Street) near the United Nations at 3:00 PM for the "Mass for Peace and Reconciliation in Venezuela". Afterwards, a meeting will be held in the rectory hall to discuss concerns and future projects. Also, the Venezuelan organization AVENY is planning a concert on February 19, at the Blessed Sacrament Church, with the following performers: Aquiles Báez, Simón Díaz, Gonzalo Grau, Marco Granados, Omar Ledezma, Jose Angel Pérez, Julio Briceño (Los Amigos Invisibles), Luisito Quintero, Neil Ochoa, Marisabella Méndez. (For further information, call 1(917) 5194393- 1(646)2446692-1(917)5194752) In addition, the Latin American Cinema Festival takes place February 10-17 (www.lacinemafe.com). (Check www.11abril.com for details). On February 24 at 12:00 pm, Columbia University will hold a panel discussion between IESA professor Michael Penfold and UCV professor Samuel Moncada. The panel is in room 802 of the SIPA building on 118th Street off of Amsterdam Avenue.

I hope you are safe, content, and peaceful, wherever this e-mail finds you.

Email written by a PDVSA worker from La Campina Situación Piso 12 Torre Oeste La Campiña

Compañeros Piso 12, a continuación les informo la situación del Piso de acuerdo a conversación sostenida con una persona que está trabajando:

1. Hoy en el Piso 12 se estaban recogiendo todas nuestras pertenencias, las cuales se están metiendo en cajas. La operación la están llevando a cabo entre 1 y 2 personas por oficina junto con representantes de una notaria. Esto lo dirije un militar retirado. Todos los modulos fueron violentados y las micros desaparecieron, su destino: Incierto.
2. Magda se reintegró a trabajar hoy.
3. Las persona trató de ingresar a su oficina al 12 para sacar sus cosas personales, y recibió mal trato del militar retirado quien le gritó: "Qué haces tu aquí", "Fuera", "Fuera". La persona acudió a alguien de PCP, quien le dijo al militar, jefe del comando de vacio del piso, que dejara a la persona sacar sus cosas ya que dicha persona estaba trabajando.
4. Parece ser que si alguien va al edificio a tratar de recoger sus cosas, lo obligan a firmar la famosa carta. Esto solicité me lo averiguaran mejor.
5. Hay personas despedidas (ya en lista) que se han reintegrado. Los obligan a pasar por el Piso 1 de la Torre Este y ahí te obligan a firmar la famosa carta, bajo un formato que llaman: Solicitúd de Reclamo donde haces una declaración de hechos.
6. En algunos casos, los que no han salido en lista, no pasan por el Piso 1 de la Torre Este.
7. Hubo una asamblea en el Auditorium. La Linea de Mando, como se llama ahora la nueva gerencia, sugirió la posibilidad de reincorporar a todas las personas. Sin embargo, los trabajadores de la Base se pararon y gritaron: "No los dejen volver, que se jodan, que se jodan..."
8. Esta famosa Base también solicitó a gritos en el auditorium a la Linea de Mando que a todos los gerentes de primera linea que estuvieran solicitando jubilación, que no se la dieran, "que los botaran y que se jodan".
9. La persona también me comentó y les confieso que esto fue como si me dieran un golpe en el estómago, que el nombre de PDVSA que estaba en la pared de la recepción de la Torre Oeste, donde están las muchachas recepcionistas fue eliminado y ahora dice MEM.
10. Las recepcionistas del PH donde ahora está el MEM, fueron pasadas a la recepción de Planta Baja de la Torre Oeste.
11. En casi todos los pisos hay Guardias Nacionales. Estoy tratando de averiguar cuál será el destino de nuestras cosas personales, las que queden!!. Saludos

Daily International News Review, Venezuela