Adamant: Hardest metal
Thursday, July 10, 2003

Venezuela PDVSA's Rodriguez says oil demand dips

Reuters, 06.25.03, 12:43 PM ET
CARACAS, Venezuela, June 25 (Reuters) - Demand for Venezuela's crude has lessened during the second quarter after a stronger-than-expected surge as the world's No. 5 exporter restarted output disrupted by a two-month strike, the state oil company chief said on Wednesday.
"We've had a surprisingly better demand for crude and products ... and that has somewhat reduced inventories which we are revising at the moment to avoid any surprises," PDVSA President Ali Rodriguez said.
"Recently that has started to lessen which always happens in the second quarter of the year," Rodriguez told state-run television after Fitch Ratings upgraded its rating on PDVSA to reflect the recovery of output.
Fitch said in a statement the changes followed the government's success in restarting oil production after the strike severely disrupted output until fizzling out at the start of February.
The ratings agency said it upgraded the senior unsecured foreign currency rating of PDVSA to B- from CCC+ following a similar upgrade on Venezuela's long-term foreign currency rating and long-term local currency ratings.
The strike from December to January failed to oust leftist President Hugo Chavez. But it battered the economy by choking off the crude shipments that provide about half of the state's total revenue.
The government fired more than 18,000 PDVSA employees for taking part in the shutdown and used troops and replacement workers to restore production.
PDVSA says output has been restored to the 3.1 million barrels per day it produced before the strike. Dissident oil workers, however, estimate production is lower and say the government has struggled to completely restart its refinery system and some older operations.
Fitch said it also has revised its Rating Watch to positive from negative for four joint ventures between PDVSA and foreign oil firms -- the Petrozuata and Hamaca projects with ConocoPhillips (nyse: COP - news - people), the Sincor venture with TotalFinaElf <TOTF.PA> and the Cerro Negro project with Exxon Mobil (nyse: COP - news - people).

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