Venezuela May Supply Oil to U.S. Strategic Reserve, WSJ Says

June 2 (<a href=quote.bloomberg.com>Bloomberg) -- Venezuela is offering to supply millions of barrels of crude oil to the U.S. Strategic Reserve in a transaction worth as much as $1 billion over three years, the Wall Street Journal said, citing oil-industry officials.

The reserve, established by Congress to act as a buffer during energy crises caused by disruption in the oil markets, doesn't normally buy crude direct from producers; the Venezuela deal is being put together by Free Market Petroleum LLC with the involvement of Jack Kemp, a former U.S. congressman and the Republican Party's vice- presidential candidate in 1996, the paper said.

Free Market Petroleum's involvement follows a strike within the Venezuelan industry against the policies of President Hugo Chavez, noted for his leftwing views and anti-U.S. rhetoric; that strike led to the dismissal of 18,000 oil workers and managers, including much of the sales force of Petroleos de Venezuela, the state-run oil monopoly, the Journal reported.

Kemp, who says he's a member of Free Market's board of directors, met on a number of occasions with U.S. Department of Energy Officials in Washington, and has met Chavez and his ministers and is a friend of Bernardo Alvarez, Venezuela's ambassador in the U.S., the Journal said.

(WSJ 6-2 A2)

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