reuters.com Thu January 23, 2003 01:41 PM ET By Pascal Fletcher

CARACAS, Venezuela (Reuters) - Several hundred thousand supporters of Venezuelan President Hugo Chavez rallied in Caracas on Thursday to back the defiant leftist leader who is resisting an opposition strike battering the economy.

To the sound of throbbing drums and trilling whistles, followers of the populist president marched from the east and the west of the capital to converge on a downtown avenue. The government brought many of them by bus from other cities.

Chavez called the rally to protest the opposition strike, which has ground on for more than seven weeks, slashing oil output by the world's No. 5 petroleum exporter.

Chanting "Hey, hey, Chavez is here to stay," the marchers, many waving pro-government banners, noisily rejected opposition calls for the president to resign and hold early elections.

Several carried Cuban flags and portraits of the guerrilla legend Ernesto "Che" Guevara, reflecting the left-wing ideology that permeates the president's self-styled "revolution."

The nation is tensely divided over Chavez's rule. While foes accuse him of dragging Venezuela toward Cuba-style communism, his backers hail him as a champion of the poor.

"We have to support our president," said Chavez supporter Atilio Mata, a 50-year-old grocer wearing a red beret, a symbol of Chavez's movement.

The 53-day-old opposition shutdown has choked off the government's oil income, triggering a fiscal crisis and forcing the government to temporarily suspend foreign currency trading and slash budget spending for 2003. The Central Bank is preparing foreign exchange controls to stem a sharp slide in the bolivar currency and falling international reserves.

Supplies of gasoline and some food items have been disrupted, causing anger and frustration among the population.

The cut in oil exports has helped push up the price on international markets at a time when it is already high because of fears of a possible war in Iraq, another major producer.

Thursday's rally rekindled fears of violence. At least six people have been killed in clashes between rival protesters since the strike began Dec. 2. To avoid confrontation, opposition supporters stayed at home Thursday.

IS CHAVEZ WINNING? Chavez, who was elected in 1998 and survived a short-lived coup last year, has vowed to beat the strike, condemning his striking foes as "terrorists" attempting to topple him. "Bit by bit, we're defeating the chaos," he said late Wednesday.

The combative former paratrooper has proved many pundits wrong by holding out against the crippling strike for so long.

"I think he's winning this round ... his strategy is to wear down the opposition and wait. It's a war of attrition he thinks he can win," Michael Gavin, Head of Latin American Economic Research for UBS Warburg, told Reuters.

The president, who appears to have the backing of the armed forces, has sent troops to take over strike-hit oil installations and raid food plants the government alleges are hoarding products. One of the plants raided last week was a local bottling affiliate of Coca-Cola Co. .

Thursday's pro-Chavez marchers carried a huge model of a Coca-Cola bottle painted with the words" "Don't drink it!."

Gavin predicted Chavez could hold out against the opposition onslaught in the short term but the pressure for elections was building. "Chavez will have to choose between remaining democratic and staying in office," Gavin said.

Opposition hopes of testing Chavez in a national vote next month were dashed Wednesday when the Supreme Court suspended a nonbinding referendum on his rule planned for Feb 2.

Opposition leaders accused the tribunal of bias. They said the ruling showed how the president had taken over the nation's democratic institutions and was ruling like a dictator.

Government supporters Thursday tore down an opposition billboard supporting the suspended Feb. 2 referendum.

Chavez tells foes they should wait until Aug. 19, halfway through his term, when the constitution allows for a binding referendum on his rule, which is due to end in early 2007.

Oil production has been creeping back up in recent weeks as the government struggles to restart oil fields and refineries. It says that output is now running at more than 1 million barrels a day, around a third of pre-strike levels But strike leaders say production is still around one fifth of normal.

The United States, alarmed by the cutoff of more than 13 percent of its oil imports because of the Venezuela crisis, is part of a six-nation "group of friends" which will meet in Washington Friday to discuss ways of solving the conflict.

In a broadcast late Wednesday, Chavez voiced reservations about the "friends" group -- which also includes Brazil, Mexico, Chile, Spain and Portugal. He insisted it should be expanded to include nations like China, Russia and France. (Additional reporting by Fabian Cambero)

www.tribnet.com By CHRISTOPHER TOOTHAKER, Associated Press

CARACAS, Venezuela (January 23, 10:31 a.m. PST) - Hundreds of thousands of supporters of President Hugo Chavez marched Thursday to protest a 53-day-old strike intended to topple their leader and to celebrate the 45th anniversary of the fall of Venezuela's last dictator.

"Chavez! Chavez!" demonstrators chanted at a bus terminal in southwestern Caracas, one of two gathering points for marches that were to converge in a central avenue. They also gathered at a park in the east side, setting off earthshaking fireworks.

"We have to defend our democracy, our constitution," said Jose Garcia, 65, a retired customs agent. "Chavez is the only president that has really, really stood up for the poor."

Thousands of people wore red bandanas reading "Chavez" and waved small blue copies of Venezuela's constitution, which the former army paratrooper pushed through in 1999 as a cornerstone of his self-described "revolution" to help the poor. At least 300,000 people marched, said Caracas Fire Chief Rodolfo Briceno.

Chavez needs the show of support.

The crippling strike, called Dec. 2 to demand Chavez resign or call early elections, has dramatically reduced oil production in the world's fifth-largest exporter and caused the currency, the bolivar, to lose 25 percent of its value this year as Venezuelans and investors have bought dollars.

Ali Rodriguez, the president of state oil monopoly Petroleos de Venezuela S.A., told the state news agency Venpres that 75 percent of blue collar workers and 50 percent of administrators had returned to work. PDVSA employs about 40,000 people, about half of them blue collar workers.

Rodriguez, a Chavez ally, also said crude oil production was back up to about 1 million barrels a day after hitting a low of 200,000 barrels a day earlier in the strike. Before the stoppage, Venezuela produced 3 million barrels a day.

In a speech broadcast late Wednesday, Chavez announced he would impose foreign exchange controls to protect the bolivar. The policy will set limits starting next week on the amount of dollars or other foreign currencies Venezuelans can accumulate. Earlier Wednesday, the central bank suspended foreign currency trading for a week as political and economic uncertainty fed a surge in demand for dollars.

Strike leader Carlos Ortega, president of the nation's largest labor union, accused Chavez's supporters of planning a violent rampage in the capital. He urged government adversaries "to stay at home" to avoid "a massacre."

At the march, pro-Chavez lawmaker Nicolas Maduro denied violence was planned.

"With their Nazi-fascist ideology, they have a racist view of the people, a delinquent people," he said. "This is a dignified and decent people."

Six people have died during protests since the strike began, including a man killed Monday during clashes between Chavez foes and followers. About 2,000 National Guard troops and police patrolled Caracas on Thursday.

The marches marked the downfall of Gen. Marcos Perez Jimenez, who was deposed on Jan. 23, 1958, after a decade of iron-fisted rule. Four decades of democratic governments followed - but "chavistas" believe Chavez, who was elected in 1998 and re-elected in 2000, is the first president to stand up for the interests of Venezuela's poor majority.

Opponents accuse Chavez, who led a failed coup in 1992, of running roughshod over democratic institutions and wrecking the economy with leftist policies.

Thursday's march came after a day of disappointment for the opposition.

On Wednesday, Venezuela's Supreme Court indefinitely postponed a Feb. 2 referendum that would have asked citizens whether Chavez should resign.

The decision came just 11 days before the scheduled vote and stunned the opposition, which had hoped the plebiscite would prompt the embattled leader to quit. Government opponents presented the elections council with over 2 million signatures in November to convoke the referendum.

"It's a slap in the face for millions of Venezuelans who are waiting for a solution to the crisis," said opposition leader Rafael Alfonzo.

Chavez called the ruling "fair," adding that "it eliminates the terrible uncertainty that was affecting the country."

www.voanews.com VOA News 23 Jan 2003, 17:23 UTC

Tens of thousands of pro-government demonstrators are rallying in the Venezuelan capital of Caracas to show support for President Hugo Chavez. The rally Thursday, comes after the Supreme Court on Wednesday indefinitely blocked the opposition from holding a referendum next month on Mr. Chavez's rule.

Mr. Chavez had opposed the vote, saying the constitution only allows for a referendum in August, halfway through his term, and the opposition must wait until then for the vote. A general strike in Venezuela is now in its 53rd day. Strike leaders have urged the opposition to stay away from Thursday's demonstration in an effort to avoid possible violence. Six people have been killed in clashes between the rival political sides since the start of the strike.

President Chavez on Wednesday suspended foreign exchange trading for five days in an attempt to bolster the nation's sagging currency, the bolivar, which has lost more than 24 percent of its value this month.

International representatives are to gather in Washington to help find a solution to the crisis. The newly formed six-nation "group of friends" of Venezuela is to hold its meeting Friday at the headquarters of the Organization of American States.

abcnews.go.com

CARACAS, Venezuela Jan. 23 — Hundreds of thousands of supporters of President Hugo Chavez marched Thursday to protest a 53-day-old strike intended to topple their leader and to celebrate the 45th anniversary of the fall of Venezuela's last dictator.

"Chavez! Chavez!" demonstrators chanted at a bus terminal in southwestern Caracas, one of two gathering points for marches that were to converge in a central avenue. They also gathered at a park in the east side, setting off earthshaking fireworks.

"We have to defend our democracy, our constitution," said Jose Garcia, 65, a retired customs agent. "Chavez is the only president that has really, really stood up for the poor."

Thousands of people wore red bandanas reading "Chavez" and waved small blue copies of Venezuela's constitution, which the former army paratrooper pushed through in 1999 as a cornerstone of his self-described "revolution" to help the poor. At least 300,000 people marched, said Caracas Fire Chief Rodolfo Briceno.

Chavez needs the show of support. The crippling strike, called Dec. 2 to demand Chavez resign or call early elections, has dramatically reduced oil production in the world's fifth-largest exporter and caused the currency, the bolivar, to lose 25 percent of its value this year as Venezuelans and investors have bought dollars.

Ali Rodriguez, the president of state oil monopoly Petroleos de Venezuela S.A., told the state news agency Venpres that 75 percent of blue collar workers and 50 percent of administrators had returned to work. PDVSA employs about 40,000 people, about half of them blue collar workers.

Rodriguez, a Chavez ally, also said crude oil production was back up to about 1 million barrels a day after hitting a low of 200,000 barrels a day earlier in the strike. Before the stoppage, Venezuela produced 3 million barrels a day.

In a speech broadcast late Wednesday, Chavez announced he would impose foreign exchange controls to protect the bolivar. The policy will set limits starting next week on the amount of dollars or other foreign currencies Venezuelans can accumulate. Earlier Wednesday, the central bank suspended foreign currency trading for a week as political and economic uncertainty fed a surge in demand for dollars.

Strike leader Carlos Ortega, president of the nation's largest labor union, accused Chavez's supporters of planning a violent rampage in the capital. He urged government adversaries "to stay at home" to avoid "a massacre."

At the march, pro-Chavez lawmaker Nicolas Maduro denied violence was planned.

"With their Nazi-fascist ideology, they have a racist view of the people, a delinquent people," he said. "This is a dignified and decent people."

Six people have died during protests since the strike began, including a man killed Monday during clashes between Chavez foes and followers. About 2,000 National Guard troops and police patrolled Caracas on Thursday.

The marches marked the downfall of Gen. Marcos Perez Jimenez, who was deposed on Jan. 23, 1958, after a decade of iron-fisted rule. Four decades of democratic governments followed but "chavistas" believe Chavez, who was elected in 1998 and re-elected in 2000, is the first president to stand up for the interests of Venezuela's poor majority.

Opponents accuse Chavez, who led a failed coup in 1992, of running roughshod over democratic institutions and wrecking the economy with leftist policies.

Thursday's march came after a day of disappointment for the opposition.

On Wednesday, Venezuela's Supreme Court indefinitely postponed a Feb. 2 referendum that would have asked citizens whether Chavez should resign.

The decision came just 11 days before the scheduled vote and stunned the opposition, which had hoped the plebiscite would prompt the embattled leader to quit. Government opponents presented the elections council with over 2 million signatures in November to convoke the referendum.

"It's a slap in the face for millions of Venezuelans who are waiting for a solution to the crisis," said opposition leader Rafael Alfonzo.

Chavez called the ruling "fair," adding that "it eliminates the terrible uncertainty that was affecting the country."

ogj.pennnet.com DATE: January 23, 2003 FROM: PR Newswire COPYRIGHT: Copyright © 2003 PR Newswire Association LLC. All rights reserved.

Harvest Natural Resources Updates December Sales

HOUSTON, Jan. 23 /PRNewswire-FirstCall/ -- Harvest Natural Resources, Inc. (NYSE:HNR) today reported the Company's Venezuelan sales totaled 270,000 barrels of oil in December while another 130,000 barrels were produced into storage. Sales were reduced approximately 550,000 to 600,000 barrels during the month as a result of production being shut-in as of December 21, 2002. Fourth quarter sales in Venezuela were approximately two million barrels of oil.

Harvest President and Chief Executive Officer, Dr. Peter J. Hill, said, "Harvest had a very successful 2002. While production for the year will fall just short of the 28,000 barrels of oil per day guidance due to the closing down of our wells in Venezuela, cash flows from operating activities before changes in operating assets and liabilities should be within the $45 million and $55 million guidance range provided earlier."

Hill added, "We are disappointed that events in Venezuela have interrupted our oil production and principal cash flow stream. We estimate it would take two to three weeks to bring our fields back to full production after activities return to normal although sales could begin within a few days. Based on the information available to us at this time, we believe recoverable reserves should not be affected as a result of the shut down of the fields."

Hill continued, "Total monthly cash requirements, necessary to fund continued operating, overhead and debt service costs average approximately $4.5 million to $5.0 million per month. In addition, we continue to spend minor amounts of capital to maintain momentum for the gas project. Currently, the Company has approximately $85 million of cash. In the event that the situation in Venezuela becomes protracted, we will take additional steps to mitigate our financial exposure."

Loan covenants in the various project financing agreements used to fund the construction of facilities in Venezuela provide that if production ceases for more than 30 consecutive days, the loan maturities can be accelerated. As a result, the Company sought and received a waiver until February 18, 2003 of such provisions in order to remain in compliance with the terms of these loan agreements. The Company believes that, if necessary, the lender will extend the waiver.

Harvest Natural Resources, Inc., headquartered in Houston, Texas, is an independent oil and gas development company with principal operations in Venezuela and Russia. For more information visit the Company's website at www.harvestnr.com .

CONTACT: Steven W. Tholen Senior Vice President, Chief Financial Officer (281) 578-8020

Ken Dennard / kdennard@drg-e.com Lisa Elliott / lelliott@drg-e.com DRG&E (713) 529-6600