05/29/2003 - Source: <a href=www.latintrade.com>LatinTrade-BNamericas

Venezuela's state heavy industry holding company CVG expects to launch its carrier of carriers business late this year or early next, using fiber optic infrastructure installed along the distribution network of its power generation subsidiary Edelca, an Edelca executive told BNamericas. The government first authorized the CVG to launch the telecoms division in June 2002, but Edelca communications manager Margarita Rosendo said since then the company has been busy finalizing the new division's corporate structure, awaiting legal approval for each detail. The December-January national strike in protest against the Hugo Chavez administration also held back the process, and although the political situation remains unstable the CVG has decided to go ahead with its search for a strategic partner because of demand from carriers, Rosendo said. "If it keeps raining you can still go out if you take an umbrella!" she added. CVG chairman Francisco Rangel announced this week the company would officially present the project to investors in Caracas on June 5, adding that several national and international firms have shown interest in partnering on the project. Edelca has installed 1,500km of fiber along its electricity transmission network, and will look at installing another 1,500km once the strategic partner is on board, Rosendo said. The government aims to offer a 45% stake in the venture, to match its own 45% stake, and CVG employees will hold the remaining 10%.

<a href=www.vheadline.com>Vheadline Posted: Tuesday, April 22, 2003 By: Patrick J. O'Donoghue

Movimiento Quinta Republica (MVR) National Tactical Command (CNT) has objected to 5/22 clauses of the negotiated settlement between government and opposition. 

Party spokesman, William Lara says MVR would like to see the adjective "participative" included in clause 6 because it describes the model of democracy currently relevant in Venezuela and rejects the participation of international observers as "verifiers" in the disarming of civilians plan, as stipulated in clause 10. 

Lara argues that such a role would be against national sovereignty ... "we would be willing to accept them as technical advisers."

MVR would also like to see the recall referendum extended to other elected positions besides the presidency and rejects clause 20, which establishes the referendum as priority for the new National Electoral College (CNE). "It is not prudent to force the pace and it would violate the CNE's autonomy." 

Lara did not say whether the MVR would recommend the President not to sign the agreement ... "we don't have the authority to condition the government's response."

World > Americas from the April 15, 2003 edition The Christian Science Monitor By David Buchbinder

CARACAS, VENEZUELA – At the gleaming offices of Petroleos de Venezuela (PDVSA), the country's state-owned oil giant, a corporate revolution is under way. Nine-to-fivers have come to think of themselves as patriots. Senior managers now eat at the same cafeteria tables as secretaries. And former soldiers have left the battlefield for the boardroom.

After PDVSA workers walked off the job last December in a bid to force Venezuelan President Hugo Chávez from office, the fiery populist hitched his social revolution to the $110 billion business: He purged the company's ranks and installed his own people. What was widely regarded as a world-class energy company before the strike has a new philosophy: to help the poor. And a new corporate culture is gradually taking shape, injected with the president's particular brand of leftist ideology.

Whether or not this do-good idealism can prevail amid the high-pressure realities of running the world's fifth-largest oil supplier remains to be seen. For a country that relies on PDVSA for 50 percent of its federal budget, the success or failure of this massive corporate social experiment could have ripple effects throughout the country - even the world - for years to come.

"The old culture is dead, and a new one is developing," says Omar Enrique Perez, a compensation analyst with 15 years at the firm, who is working to slash salaries across the board - including his own. "Because we feel we have to do something about the problems that are confronting our country, and we believe our work will help Venezuela develop."

While PDVSA's rhetorical about-face has yet to lift up the poor - even in the stone-broke villages that surround the oil refineries - change has swept through the company's Caracas headquarters.

In addition to the classless cafeteria, volunteerism is up, and salaries are said to be on their way down. The dress code has been loosened, and in some departments the high-five has replaced the curt nod in the hallways.

"There has been a change of mentality in all levels of the company," says a member of PDVSA's board of directors, who speaks on the condition of anonymity. "We believe that PDVSA should be subordinated to the needs of the state. For us, job No. 1 is fighting poverty."

The main force reshaping the company's philosophy is Chávez himself. The former paratrooper has handpicked company managers to promote his vision for a more egalitarian society and has vowed to plow more oil profits into social programs.

PDVSA has been staggered by the dismissal of 17,000 workers, nearly half the workforce, forcing the company to bring in help from private industry and, controversially, the ranks of the active-duty military. One commander, who helped put down the short-lived coup against Chávez a year ago by driving a tank up to the gates of the presidential palace, is now assisting with restructuring efforts now under way. Another soldier uses a military metaphor to explain the role of the Army in the oil company.

"We're here to establish a beachhead, move in, and clean the place up," he says. "When we are finished ... we will move on."

A humanitarian oil company is almost a contradiction in terms, though, and many critics are dismissive of the lofty sentiments heard inside the company.

"Plain and pure rhetoric," says Edgar Leal, senior associate with Cambridge Energy Research Associates, in Cambridge, Mass. "What are they going to do, have PDVSA start distributing food? They have a business to run."

The man in charge of this business is Ali Rodriguez, a former guerrilla fighter who ran the OPEC oil cartel until he was installed by Chávez as company president. Mr. Rodriguez has not won over his critics, including the far left, who question his decision to eschew an oil embargo against the United States by countries opposed to the war in Iraq.

But Rodriguez has signed on with the government game plan - to divert some revenue to federal coffers that would otherwise be reinvested in PDVSA. The government says infusions of cash into schools and hospitals has already pushed down illiteracy and infant mortality rates.

Previously, PDVSA's management used its considerable degree of autonomy to aggressively explore for oil, develop new technologies, and acquire overseas assets. The new PDVSA management says much of that money was wasted, and points to operating costs that are three times higher than other oil majors as proof. Officials at the energy ministry say that restructuring will save $1 billion a year.

But critics say the new system can't be sustained. "Chávez and Rodriguez will probably use whatever they can get out of PDVSA for projects this government wants to do," says Michael Coppedge, a political science professor and Venezuela specialist at the University of Notre Dame in South Bend, Ind. By some measures, PDVSA's production capacity has already suffered as a result. The company was operating 120 oil rigs only four years ago. Today that number has fallen to less than 40. "They may be able to extract more revenue from PDVSA than before for a short time, and then production capacity will fall, and the oil industry will deteriorate and won't be able to produce as much and earn as much," Mr. Coppedge adds.

Oil industry experts also say that the loss of many skilled laborers and specialists will negatively impact PDVSA's long-term capacity to grow and produce.

More important, they say that oil alone cannot meet all of Venezuela's needs, even in the rosiest of scenarios.

"There's a myth in this country that petroleum can save us, but at least in the short term, that's just not possible," says Elie Habalian, a retired professor and an expert in petroleum economics. "To Venezuelans, oil is like blood; without it, this country would be nothing. But sooner or later, we're going to have to find other solutions to our problems."

World from the April 15, 2003 edition Reporters on the Job • REEDUCATION TAKES TIME: Contributor David Buchbinder went to Venezuela's state-run oil company recently to report on high-minded efforts to give its elite corporate culture a more populist flair (see story). During his visit, not surprisingly, he was given a grand tour of the company's facilities. Then he and his hosts headed out to lunch at one of Caracas's finest restaurants.

It was a bit surprising to a reporter who expected something more on the lines of an arepa, a corn bun filled with meat or black beans that is Venezuela's answer to the tuna-fish sandwich. "It was the best meal I ever had in my life," says David, who dined with three company employees. The food, service, and atmosphere were without compare - but David found the VIP treatment at odds with the corporation's stated goals of helping the poor.

"I estimate the cost of lunch, depending on the prices on the spot market that day, at around three or four barrels of oil," he says.

Amelia Newcomb Deputy world editor

By Associated Press- Boston.com, 4/13/2003 19:35

CARACAS, Venezuela (AP) Venezuela's oil production has risen to its highest level since before a two-month strike crippled operations, the energy minister said Sunday.

Rafael Ramirez said Venezuela was pumping 3.2 million barrels a day, up slightly from 3.1 million at the end of March. Venezuela's output quota determined by the OPEC oil cartel is 2.8 million barrels a day.

''We are compensating for what we couldn't place on the market'' during the strike, Ramirez told the government news agency, Venpres.

Production dropped below 200,000 barrels a day during the walkout, which began in December. The government fired 17,000 of the state oil company's 40,000 workers and gradually restarted paralyzed oil refineries.

The strike was called to force President Hugo Chavez to step down or agree to early elections on his rule but petered out in February without achieving its objectives.

Venezuela depends on oil exports for almost half of government income and 80 percent of foreign currency receipts.

Organización de los Estados Americanos Situación en Venezuela 9 de abril, 2003

El diálogo político entre el gobierno venezolano y la oposición democrática “avanza sustantivamente”, señaló hoy el Embajador de ese país ante la Organización de los Estados Americanos (OEA), Jorge Valero, durante una sesión del Consejo Permanente. Al recordar el golpe de estado del pasado 11 de abril del año 2002 en contra del gobierno del Presidente Hugo Chávez Frías, el Embajador Valero dijo que “gracias a la valentía e hidalguía del pueblo de Venezuela los golpistas fueron derrotados con la reposición en el poder del Presidente legítimo”, en tanto que “la OEA y la comunidad internacional condenaron el golpe y saludaron el restablecimiento de la democracia”.

El diplomático venezolano sostuvo que “el plan de sabotaje en contra de la industria petrolera ocasionó perdidas por el orden de los 7.36 millardos de dólares, cifra equivalente al 33 por ciento del presupuesto nacional”. Sin embargo, “a pesar de los daños económicos y los desafueros políticos cometidos, Venezuela recupera progresivamente su normalidad”, enfatizó.

Tras explicar que la recuperación de la industria petrolera “ha sido acelerada y sorprendente”, el Embajador Valero dijo que la producción de crudos supera actualmente los 3 millones de barriles diarios y las exportaciones han alcanzado 2 millones 800 mil barriles, cumpliéndose con la cuota de la OPEP. “Venezuela avanza hacia una plena reactivación productiva”, puntualizó.

Finalmente destacó que la Carta Democrática Interamericana fue puesta a prueba, por primera vez, con motivo del golpe de estado del 11 de abril del año pasado y agregó que las resoluciones adoptadas por el Consejo Permanente y la Asamblea General de la OEA “confirman el profundo espíritu democrático que prevalece en este foro” y “estimulan al gobierno venezolano a continuar ampliando las fronteras de la democracia”.