Read Source By Associated Press, 3/26/2003 15:31

CARACAS, Venezuela (AP) President Hugo Chavez said Venezuela needs to restructure its $23 billion foreign debt as it struggles with a severe cash crunch in the wake of a devastating general strike.

''Venezuela needs to restructure its external debt, which is very heavy,'' Chavez said Wednesday in a speech to business owners. He did not elaborate.

Venezuela's foreign debt amounts to 37 percent of its $63 billion economy. The country faces payments of $5 billion this year to service its foreign debt, Chavez said.

The president also urged the Central Bank to lower interest rates, which he said averaged 50 percent. He said he would ask the Supreme Court to order the Central Bank to act if it didn't do so on its own.

Venezuela lost $6 billion during an unsuccessful two-month strike to demand Chavez's resignation or early elections, according to government estimates.

The walkout paralyzed Venezuela's oil industry, the world's fifth largest exporter and source of half of public revenue. Tax collection, the source of most of the remaining government income, also fell as thousands of businesses and the stock market closed.

Oil production is recovering. The government estimates production is more than 3 million barrels a day almost normal while strike leaders put it at 2.4 million barrels.

Private economists estimate Venezuela's economy could shrink up to 40 percent in the first three months of the year. It contracted almost 9 percent in 2002.

Unreliable Reuters, 03.26.03, 3:04 PM ET

CARACAS, Venezuela, March 26 (Reuters) - Venezuela has ruled out a moratorium or a forced restructuring of its foreign debt but plans a voluntary debt swap from the second quarter, Finance Minister Tobias Nobrega told Reuters Wednesday. "We rule out completely any idea of a moratorium or a forced restructure ... these are market operations," added Nobrega, who said that the government had been working on the swap program since he announced it last year. "We will continue to comply with our obligations," he said. Nobrega said that the government was preparing to present its debt swap proposal to international markets in the second quarter of this year. Venezuela's government, facing a fiscal crunch after an two-month opposition strike disrupted its vital oil production, is scrambling to jump-start the battered economy of the world's No. 5 petroleum exporter.

"The San Jose Accord in full swing" Observer Reporter Saturday, March 22, 2003

WESTERN BUREAU -- Jamaica will next week sign an agreement with Ecuador for the supply of 12,000 barrels of oil per day from that country, as the Government puts measures in place to ensure that the country's oil supply is not affected by the US/Iraq war.

"The Venezuelan market should be restored for us to receive supplies within a month, but also, we have been able to pursue other markets," Commerce, Science and Technology Minister Phillip Paulwell told Montego Bay's business leaders yesterday.

He was speaking at a meeting called to discuss the impact of the war on the productive sector.

"We are therefore saying that with Venezuela back (soon), and Mexico under the San Jose Accord in full swing, and now with Ecuador coming on as a new partner, we will not have a shortage of petroleum products, whether this time or in the foreseeable future," he added.

But the minister stressed the need for energy conservation, as it was still not clear how high the price of the commodity would rise during the ongoing crisis.

"Initially the price (of oil) is falling but it is felt that we won't know where the price will reach until another week or so," Paulwell said.

At the same time, he repeated earlier reassurances given by the Government that they do not expect a shortage of food items during the crisis.

"We have adequate supplies of flour, chicken, eggs and other items that are imported generally; so we do not anticipate that we will have any problems with basic food supplies," Paulwell noted. "A lot of supplies come from North America and other areas but in none of these areas we believe the war will affect our ability to import."

The minister added that there should be sufficient domestic food items on the market due to this year's significant increase in domestic crop production.

newstribune.com Thursday, March 20, 2003

CARACAS, Venezuela (AP) -- Venezuela insists it will be a reliable wartime supplier of oil to the United States despite sometimes testy relations and a slow recovery from a two-month oil industry strike.

"We are and will continue to be the most secure supplier of oil to the United States," Vice President Jose Vicente Rangel said this week.

His pledge came despite Washington's recent criticism of President Hugo Chavez for arresting strike leaders and obstructing efforts to hold early elections. Chavez told Washington to keep out of Venezuelan affairs.

Others question how soon Chavez's government can stabilize exports after firing nearly half of the state-owned oil monopoly's 40,000 people.

Some customers complain they've had trouble contracting tanker shipments with new personnel. The government isn't releasing export figures. Pre-strike exports averaged 2.5 million barrels a day -- including 1.5 million barrels a day to the United States.

"For the first time in our history, shipping crude to the United States in time of war isn't guaranteed because of Venezuela's internal crisis," said Alberto Quiros Corradi, a former president of Shell de Venezuela.

U.S. Energy Secretary Spencer Abraham has said it could take at least two months before Venezuelan exports stabilize. While its crude quality is lower than many Middle Eastern grades, Venezuela can ship quickly to the United States compared to 40-day tanker shipments from the Middle East.

Market analysts disagree whether war in Iraq will increase or depress prices, disrupt Middle East production or affect low U.S. inventories. Venezuela traditionally has banked on price rises to boost its oil-dependent economy.

Venezuela's opposition, including nearly all oil workers, went on strike Dec. 4 to protest Chavez's handling of the economy and alleged rights abuses and to demand early elections.

Chavez, a former army officer who led a failed coup bid in 1992, was elected president in 1998 and re-elected in 2000 to a six-year term.

The strike failed. Chavez's government claims it has already surpassed its OPEC production quota of 2.8 million barrels a day and can push it to 4 million barrels by April if a protracted war increases prices.

Fired oil executives say production is closer to 2.4 million barrels. Some analysts, meanwhile, said at an OPEC meeting last week they doubted Venezuela's production had recovered so quickly after a low of 150,000 barrels during the strike.

Roger Diwan, managing director of markets at Washington-based PFC Energy, estimates Venezuela is exporting 1.8 million barrels a day and producing 2.4 million barrels a day.

"They've done a good job. They've surprised a lot of people," Diwan said Wednesday. "I never thought they would get up to this level."

Venezuela's ties with Washington have centered on oil since 1914, when the first rig tapped what proved to be the largest reserves outside the Middle East.

Developed in large part with American capital, the oil industry met U.S. needs in both World Wars, the 1973 Arab oil embargo and the 1991 Persian Gulf War. It sided with U.S. interests despite being a founding member of the Organization of Petroleum Exporting Countries and nationalizing the oil industry in 1976.

Chavez, for his part, has been uncharacteristically quiet about the Iraqi crisis. He has concentrated on consolidating control after the nationwide strike, which cost Venezuela at least $6 billion.

Oil is key to Chavez's presidency, generating 80 percent of Venezuela's export earnings and a third of its $100 billion gross domestic product. Venezuela's economy is seen contracting by at least 15 percent in 2003, and a wartime spike in oil prices could provide relief.

www.vheadline.com Posted: Thursday, March 20, 2003 By: Patrick J. O'Donoghue

Former Petroleos de Venezuela (PDVSA) managers have held another protest outside an Embassy, this time the US Embassy where they had earlier met embassy economic adviser, Louis Anderson and handed him a document in which the group warned the USA that President Hugo Chavez Frias could not guarantee oil supplies to the USA.

Spokesman Alfredo Gomez says supplies to the USA were no problem in the past.

“The situation in PDVSA isn’t the picture the government paints … it’s not producing 3 million bpd, but more like 2.3 million and less than 100,000 bpd of gasoline … it’s not sustainable for the USA.”

The group continues to argue that inexpert workers have replaced the 16,000 dismissed employees and workers adding to the lack of guarantees of supplies.

Gomez says the group will hold similar protests outside the embassies of the Group of Friends (USA, Brazil, Chile, Mexico, Spain and Portugal).