Venezuela Oil Output May Hit 2.8M Barrels

www.kansascity.com Posted on Mon, Feb. 17, 2003 CHRISTOPHER TOOTHAKER Associated Press

CARACAS, Venezuela - Oil output could reach 2.8 million barrels day within a month, when restrictions on sending tankers to Venezuelan ports are lifted, the head of Venezuela's state-run oil company said Monday.

Foreign shippers were warned against loading in Venezuelan ports during a two-month strike against President Hugo Chavez. The work stoppage ended on Feb. 3 in all sectors except the all-important oil industry.

Ali Rodriguez, president of Petroleos de Venezuela S.A., or PDVSA, accused striking employees of scaring off shippers by telling them new, inexperienced workers at docks and loading terminals presented a risk.

"Due to a publicity campaign some companies fear sending their tankers," Rodriguez told a press conference.

Some major companies in the shipping and oil industry, however, have decided to return to Venezuela. Exxon Mobil Corp. plans to resume loading this week while refiner Valero Energy Corp. has chartered a tanker to load 2 million barrels of crude.

In order to boost production as planned, stockpiled oil filling storage tanks, a bottleneck which leaves no space for freshly produced crude, must be exported.

Once exports pick up, oil output could jump to 2.8 million barrels per day - Venezuela's quota as set by the Organization of Petroleum Exporting Countries - by mid-March, said Rodriguez.

Speaking during his Sunday radio program "Hello President," Chavez said oil production has already reached 2.1 million barrels per day. However, ex-PDVSA staff claim total output stands at roughly 1.4 million barrels per day.

Venezuela, the world's fifth largest oil exporter and a major supplier to the United States, was producing 3.2 million barrels per day before the strike. Output fell as low as 200,000 barrels per day in December.

Chavez, a former paratrooper who was elected in 1998 and re-elected in 2000 to a six-year term, is continuing efforts to regain control of PDVSA.

To squeeze out dissent, Chavez has fired one-third of the company's 37,942-strong work force. He claims most of PDVSA's employees have returned to work.

Strike leaders deny the claim, saying thousands refuse to return until Chavez rescinds the firings and agrees to early elections.

At negotiations mediated by the Organization of American States, government representatives have rejected opposition demands that dissident PDVSA workers be allowed to return to their jobs.

Using tear gas and rubber bullets, National Guardsmen dispersed dozens of protesting oil workers in western Zulia state on Monday. One protester suffered injuries when shot with rubber bullets. Dissident employees also staged an anti-Chavez street march in the capital.

Chavez has balked at a proposal to hold early elections as a means of ending the nation's political stalemate. The opposition must wait for a binding recall referendum halfway through his term, or August 19, Chavez says.

Meanwhile, Venezuelans continue waiting in mile-long lines outside service stations due to gasoline shortages and reduced refining capacity caused by the strike.

Venezuela imported 11 million barrels of gasoline between December and January for the domestic market to deal with shortages. Another 12 million barrels of gasoline will be imported this month.

Normally, Venezuela refines about 250,000 barrels of gasoline per day for domestic use. Approximately 150,000 barrels are currently being refined.