Reuters, 01.06.03, 12:10 PM ET

CARACAS, Venezuela (Reuters) - Venezuela's government said it was making progress on Monday in breaking an oil export "blockade" caused by a 36-day strike by foes of President Hugo Chavez.

"In fact, there was (a blockade). What we are doing is unblocking it," Venezuelan oil minister Rafael Ramirez said in a Monday morning television interview.

Ramirez said that maritime companies that joined the strike and hindered ship loadings would be replaced in efforts to boost oil sales that account for half of government revenues.

International shipments last week by the world's No. 5 crude exporter were flat with the previous week at 500,000 barrels per day (bpd), according to calculations made by Reuters using data from shippers and state oil firm Petroleos de Venezuela (PDVSA). The OPEC nation had exported nearly 2.7 million bpd of crude and products in November, and the disruption in Venezuela, which normally provides over 13 percent of U.S. daily imports, sent oil prices near two-year highs over $33 a barrel last week.

Chavez said in a late Sunday national television address that the government was winning the battle for PDVSA. Rebel PDVSA employees say oil output has been cut to less than 200,000 bpd from 3.1 million bpd, while the government said it is at 600,000 bpd and will double in the next week.

"As of today, exports rose to 1.5 million bpd," the Populist leader said. Independent shippers reported that Venezuela loaded just over 1.3 million barrels of crude on Sunday for export in three tankers.

Of the crude loaded, 350,000 barrels were dispatched to the nearby island of Bonaire, while the German Sun carrying 450,000 barrels of crude sailed for the United States, shippers said. The PDVSA-owned Hero, laden with 520,000 barrels of crude for Lake Charles in the United States, was expected to depart Monday morning.

Only ships chartered by PDVSA and U.S. refining affiliate Citgo have loaded, as foreign firms have hesitated to have vessels attended by uncertified replacement crews hired by the government.

The government has said it will use the strike to clean up PDVSA and hire workers aligned with the interests of the state. Striking PDVSA employees have said they will not return to work until Chavez is out of office or until early elections are called, and that replacement workers will not be able to restart the industry. Oil minister Ramirez said that oil executives fired during the work stoppage would not be rehired.

January 6, 2003

CBN.com – CARACAS, Venezuela (AP) -- Supporters of President Hugo Chavez protested outside the attorney-general's office Monday to demand an investigation into two slayings the government blamed on leaders of a month-old strike.

Dozens of protesters shouted for justice, some bearing placards blaming the Caracas city police - which reports to an opposition mayor - for the killings at a political rally Friday.

Chavez promised justice for the men, who were shot in a melee of Chavez followers, opposition marchers and security forces. It was unclear who was responsible for the deaths of the two government supporters, but Chavez blamed the violence on the strike leaders and the opposition-aligned news media.

"Venezuelans cannot keep dying with impunity," Chavez said in a televised address Sunday night. "We are obligated to impart justice. The country demands it. The fatherland clamors for it."

As the two sides traded charges, Chavez claimed oil exports were recovering and had reached 1.5 million barrels a day - about half Venezuela's normal level. Striking oil executives say production is only a fraction of normal output. Venezuela is the world's fifth largest oil exporter and a major U.S. supplier.

Oil production came to a near halt because the strike, which began Dec. 2, includes some 35,000 employees of the state monopoly Petroleos de Venezuela, or PDVSA.

Chavez called leaders of the strike "traitors" and insisted they should be punished. But he stopped short of announcing new measures to force and end to the strike.

The president has already fired dozens of striking workers from the state oil monopoly and ordered troops to guard oil installations.

Thousands of Chavez supporters attended the funerals Sunday of the men killed in the melee - Oscar Gomez Aponte, 24, and Jairo Gregorio Moran, 23. Vice President Jose Vicente Rangel and several Cabinet ministers helped carry the flag-draped coffins through Caracas.

The violence erupted Friday when several hundred presidential supporters threw rocks, bottles and fireworks at thousands of opposition marchers outside military headquarters in Caracas. At least 78 people were injured.

Police fought to keep the two sides apart, firing rubber bullets and tear gas, when gunfire rang out. Opposition protesters insisted the shots came from Chavez supporters. But the government said it came from police who report to an opposition mayor.

"How long will metropolitan police officers continue being used to repress the people?" Chavez said in his speech. "We will find the assassins of Oscar Gomez and Jairo Gregorio Moran wherever they are hiding."

Chavez tried to take over the city police force last fall but the Supreme Court ordered the president to restore the force's autonomy.

He lashed out at owners of Venezuelan newspapers and television stations, accusing them of hailing strike leaders as "heroes when they are really traitors."

Strike leader Alfredo Gomez said Sunday that Chavez fired 251 more striking oil workers but government officials were not immediately available to confirm the claim. Chavez did not mention the dismissals during his television address.

Opposition leaders blame Chavez's leftist policies for a deep recession and accuse him of trying to accumulate too much power. They want him to resign or hold a nonbinding referendum on his rule, which he says would be unconstitutional.

Two police officers also were wounded Saturday when gunfire broke out during Gomez Aponte's wake. Chavez supporters fired on police after the government blamed the Caracas police for the Friday deaths, police chief Henry Vivas said.

Officers returned fire using rubber bullets and tear gas. The state news agency, Venpres, reported Sunday that a woman who the government had earlier claimed died from tear gas asphyxiation in fact survived.

Meanwhile, leaders of the Democratic Coordinator opposition movement called on Venezuelans to donate between $1.80 and $3.50 to hold the referendum on Feb. 2 as planned.

The opposition presented a petition with more than 1.5 million signatures to election authorities Nov. 6 to call for the referendum, but the National Elections Council says the Chavez-controlled Parliament hasn't authorized $22 million needed to pay for it.

Chavez, a former paratrooper who was elected in 1998 and re-elected two years later, has challenged the legality of the referendum at the Supreme Court.

The president has also said he might consider imposing martial law to defeat a general strike that has paralyzed the economy and the oil industry in the world's fifth-largest petroleum exporting country.

03:44 PM EST Jan 06

CARACAS (AP) - Supporters of President Hugo Chavez protested outside the attorney-general's office Monday to demand an investigation into two slayings the government blamed on leaders of a month-old strike. Dozens of protesters shouted for justice, some bearing placards blaming Caracas city police - who report to an opposition mayor - for the killings at a political rally Friday.

Chavez promised justice for the men, who were shot in a melee of Chavez followers, opposition marchers and security forces. It was unclear who was responsible for the deaths of the two government supporters, but Chavez blamed the violence on the strike leaders and the opposition-aligned news media.

"Venezuelans cannot keep dying with impunity," Chavez said in a televised address Sunday night. "We are obligated to impart justice. The country demands it. The fatherland clamours for it."

He lashed out at owners of Venezuelan newspapers and television stations, accusing them of hailing strike leaders as "heroes when they are really traitors."

The dispute pits Venezuelan's economic elite and their allies in the middle class who fear they will suffer under Chavez's attempts to improve the lot of the country's poor majority.

Opposition leaders blame Chavez's leftist policies for a deep recession and accuse him of trying to accumulate too much power. They want him to resign or hold a non-binding referendum on his rule.

Chavez blames economic dislocation on the opposition strike and say his opponents should wait for a binding resolution which, under the constitution, can be held by summer.

Chavez was briefly deposed in an opposition coup last year, but quickly restored to power by the military after coup leaders tried to suspend the constitution.

As the two sides traded allegations, Chavez claimed oil exports were recovering and had reached 1.5 million barrels a day - about half Venezuela's normal level.

Striking oil executives say production is only a fraction of normal output. Venezuela is the world's fifth-largest oil exporter and a major supplier to the United States.

Oil production came to a near halt because the strike, which began Dec. 2, includes some 35,000 employees of the state monopoly Petroleos de Venezuela, or PDVSA.

Chavez called leaders of the strike "traitors" and said they should be punished. But he stopped short of announcing new measures to force and end to the strike.

The president has already fired dozens of striking workers from the state oil monopoly and ordered troops to guard oil installations.

Thousands of Chavez supporters attended the funerals Sunday of the men killed in the melee - Oscar Gomez Aponte, 24, and Jairo Gregorio Moran, 23. Vice-President Jose Vicente Rangel and several cabinet ministers helped carry the flag-draped coffins through Caracas.

The violence erupted Friday when several hundred presidential supporters threw rocks, bottles and fireworks at thousands of opposition marchers outside military headquarters in Caracas. At least 78 people were injured.

Police fought to keep the two sides apart, firing rubber bullets and tear gas, when gunfire rang out. Opposition protesters insisted the shots came from Chavez supporters. But the government said it came from police who report to an opposition mayor.

"How long will metropolitan police officers continue being used to repress the people?" Chavez said in his speech. "We will find the assassins of Oscar Gomez and Jairo Gregorio Moran wherever they are hiding."

Chavez tried to take over the city police force last fall but the Supreme Court ordered the president to restore the force's autonomy.

Strike leader Alfredo Gomez said Sunday that Chavez fired 251 more striking oil workers but government officials were not immediately available to confirm the claim. Chavez did not mention the dismissals during his television address.

Two police officers also were wounded Saturday when gunfire broke out during Gomez Aponte's wake. Chavez supporters fired on police after the government blamed the Caracas police for the Friday deaths, police chief Henry Vivas said.

Monday January 6, 11:13 PM

CARACAS (Dow Jones)--December aluminum production at Venezuela's 80%-government-owned CVG-Industrie Venezolana de Aluminio, or CVG-Venalum, was a bit more than 37,400 tons, the best in the company's history, public affairs manager Leonardo Bezzara said Monday.

An ongoing 36-day-old strike general strike "had us worried for a little bit," but never shut production, Bezzara told Dow Jones Newswires in a telephone interview. Production during the year was a record 436,000 tons, he said.

Bezzara said a severe shortage of natural gas, due to the strike that began Dec. 2, shut production briefly at Bauxilum, the country's only supplier of alumina, the main raw material in aluminum production.

ADVERTISEMENT But Venalum has a constant 30-day supply of alumina in storage, while its sister aluminum producer Alcasa has a 10-day supply and Bauxilum, itself, had a 15-day supply, he said.

Gas supplies were returned to minimal required levels a few days after Bauxilum shut down, after an agreement was reached between the government and dissident managers at PdVSA Gas, the natural gas arm of state oil monopoly Petroleos de Venezuela SA (E.PVZ).

PdVSA officials agreed to maintain minimal gas levels because of the damage a total shut down would inflict on heavy industries in the region, Bezzara said.

Venalum, for instance, would take up to two years to restart if it ever shut down completely, he said.

That's because the company is currently operating 905 production cells, and a restart would have to be done at a maximum rate of two per day, he said.

The aluminum producers will likely be the last to suffer if there is a complete gas shut down because they don't use as much gas as do some of the other industries in the region, Bezzara said.

Venalum needs only about 6 million cubic feet per day of gas, Alcasa needs about 5 million cfpd, while Bauxilum needs about 50 million cfpd. Steel producer Sidor needs about 200 million cfpd, he said.

Japan's Showa Denko holds 7% in CVG-Venalum, Kobe Steel Ltd. (J.KOB) and Sumitomo Chemical Co. Ltd. (J.SUC) each hold 4%, Mitsubishi Materials Corp. (J.MMT) holds 3%, and Mitsubishi Aluminum Co. and Marubeni Corp. (J.MRB) each have 1%.

Venezuela Venalum-2: To Name $600M Contract Winner Jan 10

Venalum will name on Jan. 10 the company selected for a $600 million construction contract to build a fifth production line, the government's Venpres news agency reported.

French aluminum producer Pechiney SA (PY), Switzerland-based Glencore International (Z.GNC) and a Venezuelan-U.S. group named ACV-Fluor Daniels have submitted indications of interest in the deal, state mining and heavy industry holding company Corporacion Venezolana de Guayana, or CVG, has said.

The fifth line should add 200,000 metric tons in annual production capacity, approximately doubling current capacity in the first four lines, according to CVG information.

Venezuela is looking for so-called "strategic partners" to invest in sectors ranging from gold and diamond mining to iron, steel and aluminum production.

The first such deal was signed in 2001 by Pechiney which agreed to invest $208 million without retaining any equity in Bauxilum. Pechiney is being repaid its investment over a few years in the form of cheap Bauxilum-produced alumina.

Opposition leaders have said they won't lift the strike until President Hugo Chavez agrees to call elections in 30 days if he loses a Feb. 2 nonbinding vote on whether he should remain president.

Chavez has thus far maintained the constitution only requires him to accept the results of a possible recall referendum next August, the midpoint of his term.

Chavez's critics blame his left-leaning policies for country's deepening economic crisis with a likely 8% contraction in 2002, amid 17% unemployment, and 31% annualized inflation sparked by a 46% devaluation of the bolivar ($1=VEB1403).

Chavez has said the problems are due to an "economic coup" led by his opponents.

CVG Website: www.cvg.com

Monday January 6, 11:07 PM

An ongoing 36-day-old strike general strike "had us worried for a little bit," but never shut production, Bezzara told Dow Jones Newswires in a telephone interview. Production during the year was a record 436,000 tons, he said.

Bezzara said a severe shortage of natural gas, due to the strike that began Dec. 2, shut production briefly at Bauxilum, the country's only supplier of alumina, the main raw material in aluminum production.

But Venalum has a constant 30-day supply of alumina in storage, while its sister aluminum producer Alcasa has a 10-day supply and Bauxilum, itself, had a 15-day supply, he said.

Gas supplies were returned to minimal required levels a few days after Bauxilum shut down, after an agreement was reached between the government and dissident managers at PdVSA Gas, the natural gas arm of state oil monopoly Petroleos de Venezuela SA (E.PVZ).

PdVSA officials agreed to maintain minimal gas levels because of the damage a total shut down would inflict on heavy industries in the region, Bezzara said.

Venalum, for instance, would take up to two years to restart if it ever shut down completely, he said.

That's because the company is currently operating 905 production cells, and a restart would have to be done at a maximum rate of two per day, he said.

The aluminum producers will likely be the last to suffer if there is a complete gas shut down because they don't use as much gas as do some of the other industries in the region, Bezzara said.

Venalum needs only about 6 million cubic feet per day of gas, Alcasa needs about 5 million cfpd, while Bauxilum needs about 50 million cfpd. Steel producer Sidor needs about 200 million cfpd, he said.

Japan's Showa Denko holds 7% in CVG-Venalum, Kobe Steel Ltd. (J.KOB) and Sumitomo Chemical Co. Ltd. (J.SUC) each hold 4%, Mitsubishi Materials Corp. (J.MMT) holds 3%, and Mitsubishi Aluminum Co. and Marubeni Corp. (J.MRB) each have 1%.