www.forbes.com Reuters, 01.27.03, 12:23 PM ET By Tom Ashby

CARACAS, Venezuela (Reuters) - "No pact. No negotiation. Deepen the revolution," reads graffiti daubed in red paint opposite the Caracas headquarters of state oil company Petroleos de Venezuela (PDVSA).

The message is not wasted on leftist President Hugo Chavez. Faced with an eight-week-old strike intended drive him from office, he has responded by tightening his grip on the company and removing his opponents from its management.

As Venezuela's economic powerhouse and a natural workplace for the country's elite, PDVSA was an obvious target for Chavez, who draws much of his support from the slums that house almost a third of Venezuela's population.

The strike has cut off Venezuela's economic lifeline and seriously threatened Chavez's presidency. But the former paratrooper wasted no time in his counterattack, sacking 3,000 top managers, breaking the company into two small operating units, and boosting the government's role in the oil industry.

"The coup plan has allowed us to deepen the revolutionary process, because there is no other way of defeating it. We won't go back or negotiate principles because the revolution is not negotiable," Chavez said on Sunday, referring to the strike as a second attempted coup against him.

Having survived a coup in April staged by rebel military factions and key PDVSA managers, the populist leader has grown more cunning at dealing with opposition in the world's fifth largest oil exporter.

"The April coup allowed us to restructure the Armed Forces," Chavez told a news conference on Sunday. "Now the December coup, the (oil industry) sabotage, has allowed us for the first time to nationalize the oil company," he said, adding that PDVSA had become a "state within a state."

To fill the chairs emptied by the strikers, Chavez's trusted PDVSA chief, Ali Rodriguez, moved loyal bureaucrats from the Energy and Mines Ministry out of their dilapidated skyscraper in central Caracas last week to occupy PDVSA's plush La Campina headquarters in the east of the capital.

LONG-TERM SUPPLY LOSS It was a further sign that Chavez has no intention of negotiating with the strikers, whose conditions include early elections and a return to their jobs in PDVSA.

The government has said it can restore crude flows fully by the end of March.

But opponents think the changes have critically weakened a company which, while the rest of the country descended into economic turmoil, had remained a powerful competitor in the cut-throat global oil market.

Without a political settlement in which sacked PDVSA managers and skilled workers are returned to their jobs, Chavez will never get back to pre-strike output of 3 million barrels per day, the opponents have said.

"It is impossible for PDVSA to return to normal while Chavez remains in the presidency," said former energy minister Humberto Calderon, who backs the opposition.

He fears the government, in its rush to get output back up, is doing long-term damage to Venezuela's reservoirs, many of which have been pumping oil for more than half a century, while the government blames the strikers for damage to Venezuela's reputation abroad.

"Part of the damage of this strike is that PDVSA and Venezuela have destroyed their reputation as a secure energy provider to the rest of the world," Rodriguez said in a newspaper interview on Sunday.

"We will reestablish operations because that is our task, but can we really say we have won?" Rodriguez said.

POWER AND PERKS For decades, PDVSA used special privileges, including preferential access to oil revenues, relatively high wages and other perks, to accumulate power and international respect.

It attracted huge foreign investments to Venezuela, beat off multinational rivals to build up a huge global refining and marketing system, and achieved a credit rating superior to its sovereign parent.

Rodriguez, a former communist guerrilla, has argued that many of PDVSA's high-profile ventures, such as Citgo in the United States and Ruhr Oel in Germany, made no economic sense.

He saw them as part of a secret campaign to transfer Venezuelan capital from Caracas to the United States and Europe, bankrupt the company and force its privatization.

PDVSA commercials on the state television channel now aim to convince Venezuelans that PDVSA grew increasingly inefficient during those years, while its employees grew rich at the country's expense.

Chavez has dismissed oil strikers as a rich, resentful elite intent on toppling him by destroying the oil sector.

"The salary of 11 of the oil industry conspirators was twelve billion bolivars a year ($6.5 million), three million bolivars ($1,600) each per day, equivalent to the annual cost of 20 schools," the government commercial says. "In the 1970s, PDVSA handed over 70 percent to the national treasury. Now it gives 20 percent. PDVSA was devouring itself."

The new PDVSA, split into two operating units in eastern and western Venezuela, holds forums to explain the transformation in school halls in working class districts of western Caracas.

But the message has yet to impress Wall Street, which has reduced the company's credit rating deep into junk territory.

sg.biz.yahoo.com Tuesday January 28, 12:38 AM

CARACAS -(Dow Jones)- Venezuela's main Caracas Stock Exchange resumed trading Monday for just two and a half hours a day, after shutting down in support of an ongoing 57-day-old general strike against President Hugo Chavez's leadership, bourse officials said.

The exchange, which last traded Nov. 29, is open between 9:30 a.m. local time (1330 GMT) and noon (1600 GMT) until further notice, the official said.

Local banks keep about the same hours despite various government threats and demands they open full days.

The news follows reports shopping malls, schools, and franchises including most fast food restaurant chains, also plan to reopen within the next week. Much of the country's industrial operations are still shut and the government is struggling to normalize the vital oil sector without striking workers.

Strike leaders have refused to call off the most important aspect of the strike - in the oil industry - until Chavez agrees to early elections.

Chavez has said his detractors must avail themselves of constitutionally approved measures such as an amendment shortening his term or a possible recall referendum in August, the midpoint of his term.

Chavez's critics blame him for a likely 8% economic contraction in 2002, amid 18% unemployment, and 31% inflation sparked by the bolivar's ($1=VEB1853) 46% devaluation. For 2003, the currency has lost about 25%.

Chavez blames the problems on an "economic coup" by his opponents.

Caracas Stock Exchange Website:www.caracasstock.com

-By Jehan Senaratna, Dow Jones Newswires; 58 212 564 1339; jehan.senaratna@dowjones.com

www.news8austin.com 1/27/2003 9:44 AM By: Associated Press

CARACAS, Venezuela -- Embattled President Hugo Chavez promised to put price controls in place, having restricted trading of foreign currencies.

The country's economy has been crippled by an opposition strike, entering its ninth week.

Hundreds of thousands of people occupied a highway over the weekend to protest a court decision suspending a referendum on Chavez's rule. It was to have been held Feb. 2.

Opposition leaders say they will collect signatures petitioning for Chavez to quit and for pro-Chavez lawmakers to be replaced. A coalition of business, labor and political groups called the strike to pressure Chavez into accepting a referendum. The strike has greatly reduced oil production in the world's fifth-largest petroleum exporter.

Chavez said that oil production has risen to 1.3 million barrels a day. Dissident oil executives said it is about three-quarters of that level.

Reuters, 01.27.03, 10:54 AM ET

CARACAS, Venezuela, Jan 27 (Reuters) - Venezuela's stock market, restarting trading after an eight-week suspension during an opposition strike, jumped 10.43 percent Monday due to the impact of foreign exchange adjustments on market leaderCANTV <TDVd.CR> (nyse: VNT - news - people), the country's biggest telecoms company, traders said.

The Caracas stock index <.IBC> rose 836.22 points to 8,851.39 points from the 8,015.17 points close it had registered last Nov. 29, the last trading day before the strike started Dec. 2. The strike shuttered operations at the Caracas exchange.

Exchange authorities decided last week to restart stock trading which had been suspended during the 57-day-old strike. The strike was launched by foes of leftist President Hugo Chavez to demand that he resign and hold early elections. The strike, which has slashed the country's vital oil exports, is continuing.

Traders said that Monday's rise was due to a 22.68 percent gain by CANTV, whose shares are also traded in dollar-denominated ADRs on the New York Stock Exchange. In Caracas, the telecoms company's stock traded at 3,024 bolivars a share, while in New York the ADRs were trading at $10.64 each.

Battered by the impact of the crippling opposition strike, Venezuela's bolivar currency has fallen 28 percent against the U.S. dollar since the start of the strike and the government has suspended currency trading prior to introducing foreign exchange controls.

www.forbes.com Reuters, 01.27.03, 8:22 AM ET

CARACAS, Venezuela, (Reuters) - Striking Venezuelan oil workers said crude output fell slightly Monday, stalling after a three-week recovery that took flows to almost a million barrels per day, or 30 percent of pre-strike levels.

Crude output fell 20,000 bpd to 966,000 bpd, 29 percent of pre-strike levels, according to a daily oil industry report by anti-government strikers.

The government, which has used troops and replacement crews to break the eight-week-old strike, has consistently held higher estimates for crude output, pegging it at 1.32 million bpd on Sunday.

"Most of the output is in the east of the country, in northern Monagas, where reservoirs are youngest and where extraction is relatively easy and requires little technical work," said the report by strikers, many of whom occupied senior positions in state oil company Petroleos de Venezuela.

"This area has natural flow due to the well conditions... a situation which is totally different in the west, where wells require large amounts of work," it added.

The report said strike breakers were putting extra oil into existing contracts, but that its sales and marketing operation was still destroyed by the strike.

"This makes us think that the crude could be being stored," the report said.

The government has said that 75 percent of blue-collar workers have already returned to work.

Exports rose sharply last week from very low levels to near 700,000 bpd, according to ship agents and port authorities, but they were still at just 25 percent of pre-strike levels.

The anti-government strikers, who are seeking to force President Hugo Chavez to resign and call early elections, said 80 percent of oil workers were observing the strike in the east.