www.forbes.com Reuters, 01.23.03, 8:16 AM ET

LONDON, Jan 23 (Reuters) - The general strike paralysing Venezuela is costing the top 10 international oil firms operating there a combined $6.7 million a day in lost revenue, according to energy analysts Wood MacKenzie.

Seven weeks into the strike, the accumulated impact on earnings is small for most of the companies operating in the world's fifth largest oil exporting nation.

However, in its study released on Thursday, WoodMac warned that it may take two months to get some marginal fields running normally again, and said there was potential for some long-term damage to the industry that delivers 50 percent of the nation's income.

"Only upon resumption of operations will the full implications for both near-term rehabilitation and longer-term reservoir management be known," WoodMac said.

According to WoodMac's figures, the biggest financial loser among the top 10 is French giant Totalfina Elf <TOTF.PA>, which is losing $1.4 million a day in net revenues after the payment of royalty but before tax and costs.

The world's fourth largest oil company, Totalfina is expected to report a 2002 net profit of about $6.5 billion -- equivalent to about $18 million a day.

WoodMac's study also itemised the effect on North American players ConocoPhillips, Exxon Mobil, PetroCanada, and ChevronTexaco.

It also assessed the impact on other European majors Royal Dutch/Shell, BP, ENI, Statoil and Repsol-YPF. See table below. In terms of national production, WoodMac said Venezuela output had slowed to between 400,000 and 600,000 barrels a day from a 2003 forecast of three million barrels a day. The world's biggest producer Saudi Arabia produces about 8.5 million barrels a day. The strike is aimed at forcing leftist President Huga Chavez to resign and accept elections.

COMPANY RIC LOST REVENUE ($ MLN/DAY Totalfina Elf <TOTF.PA> 1.4 ConocoPhillips (nyse: COP - news - people) 1.0 ENI <ENI.MI> 0.87 Exxon Mobil (nyse: XOM - news - people) 0.77 ChevronTexaco (nyse: CVX - news - people) 0.64 RD/Shell <RD.AS> <SHEL.L> 0.53 Statoil <STL.OL> 0.47 Repsol-YPF <REP.MC> 0.38 BP <BP.L> 0.31 PetroCanada 0.29

www.vheadline.com Posted: Thursday, January 23, 2003 - 2:28:59 AM By: Robert Rudnicki

Opposition leaders have expressed their anger at the Supreme Tribunal of Justice (TSJ) ruling that blocks the planned February 2 consultative referendum, which the opposition called for in November last year.

Primero Justicia deputy Julio Borges slammed the decision as a sign that "the government doesn't car about the will of the people, it only cares about staying in power ... today there is a dictatorship in Venezuela."

Meanwhile, Coordinadora Democratica negotiator Timoteo Zambrano complained that "this is a demonstration of the political control the government has in the TSJ, "it is unfair ... the government is just blocking all democratic avenues."

The opposition is now believed to be taking a little time to consider what its next steps will be, although it now seems that the only realistic option, other than waiting for the August referendum the government is proposing, is to seek a constitutional amendment that would permit an early general election, as was proposed by former US President Jimmy Carter.

Executive Vice President Jose Vicente Rangel called on the whole nation to respect the TSJ ruling, while expressing doubt that the referendum would ever materialize.

www.vheadline.com Posted: Thursday, January 23, 2003 - 2:33:56 AM By: Robert Rudnicki

Both the European Union and the Russian government have issued statements of support for the formation of the "Friends of Venezuela" group, made up of Brazil, Chile, Mexico, Portugal, Spain and the United States.

• The group is set to hold its first meeting in Washington tomorrow.

In the EU statement, issued under the Greek EU Presidency, support for the group's contribution was extended, as well as the hope it could achieve a peaceful, democratic, and constitutional solution to Venezuela's crisis through a process of elections.

The EU also urged the Venezuelan people to so pursue a solution assisted by the Organization of American States (OAS) and the "Friends of Venezuela" group.

The Russian Foreign Ministry said it was ready to work together with other nations and international organizations to help restore peace in Venezuela. "We are convinced that the quest for a solution to the problems of today's Venezuela should be conducted through respecting democracy and constitutionality and mutual observance of the principles of rejecting violence."

www.news24.com 23/01/2003 09:13  - (SA)  

Caracas, Venezuela - President Hugo Chavez announced on Wednesday that new foreign exchange controls would be imposed within five days to protect the bolivar currency from plummeting further amid a 52-day-old general strike that has crippled the economy.

Speaking during a military ceremony, Chavez did not elaborate on exactly what limits the government would impose on currency trade.

"We've made a decision that we didn't want to take," Chavez said. "But the situation is serious and there is a persistent speculative attack against the national currency."

The decision means that Venezuelans will be limited in the amount of foreign currencies they can buy per day. The decision is meant to stem a run on the bolivar, which has lost a quarter of its value this year.

Business leaders had widely expected and feared such a decision.

Earlier on Wednesday, the Central Bank had suspended foreign exchange trading altogether for five days - meaning that Venezuelan won't be allowed to buy any foreign currencies for that time. The move was seen as an attempt to protect the bolivar until the government announced the permanent controls.

Exchange controls will help protect the bolivar and the government's depleting foreign reserves. But it will hurt businesses that depend on dollars to pay for imported goods.

"This restriction is going to hurt businesses, which depend heavily on imports, especially industry," said Albis Munoz, vice president of the Fedecamaras business chamber.

Venezuela's economy largely relies on imports - about 50% of food is imported. Soft drink producers buy sugar abroad, newspapers import paper pulp and the automobile industry depends on foreign-made parts to keep assembly lines moving.

All of those materials would be harder to get as a result of the suspension and forthcoming restrictions on currency trading.

Ruling party member Rodrigo Cabezas, president of the legislature's finance committee, said earlier on Wednesday that any exchange controls would be "temporary" - until the nation's oil industry, weakened by the work stoppage, returns to normal. Total recovery for the industry could take several months, analysts have said.

The last time Venezuela imposed foreign exchange controls was in 1995 during an economic crisis that saw the collapse of 17 banks. The controls lasted almost two years.

Cabezas said a team of economists may fix a rate of 1 500 bolivars to the US dollar. The fixed rate could go into effect next week. Previous to Chavez's announcement, the government had allowed the bolivar to float.

The bolivar reached a record low of 1 853 to the dollar on Tuesday. It has lost 25% of the its value since the beginning of the year, after losing 46% of its value in 2002.

Traders said the Central Bank has been injecting up to $70m on a day to protect the currency. Venezuela's foreign reserves stood at $11.05bn Monday, down from about $12.5bn before the strike began. Venezuela also has about $2.9bn in a rainy day fund that absorbs excess oil revenue.

B usiness representatives said the establishment of exchange controls would further restrict industrial production, which is already down - or paralysed - due to the strike.

Ricardo Tinoco, a spokesperson for Ford Motor Company, said exchange controls, "depending on the complexity" of the system, could affect the company's access to car parts used to assemble cars at its plant in Valencia.

"It would limit how many parts we import and that, obviously, will dictate our production levels," said Tinoco.

Venezuelans have been coping with severe fuel and food shortages resulting from the strike, which has slashed oil production by more than two-thirds, and crippled an industry that provides 70% of export revenue and half of government income.

Oil production stands at about 714 000 barrels a day, compared to 3 million before the strike, according to strike leaders. The government claims production is at least 800 000 barrels a day. - Sapa-AP

www.globeandmail.com By PATRICK MARKEY Reuters News Agency Thursday, January 23, 2003 – Page B12

CARACAS -- Venezuela yesterday suspended foreign exchange trading in a desperate bid to stem capital flight and a slide in the bolivar as the government battled an opposition-led strike that has drained its oil-reliant economy.

The Central Bank said it would close the foreign exchange market for five trading days and prepare temporary currency exchange and transfer curbs to fend off the impact of the shutdown aimed at forcing leftist President Hugo Chavez to resign and hold new elections.

The measures were announced just hours before the country's Supreme Court delivered a blow to the opposition campaign by suspending a non-binding Feb. 2 referendum they were planning to hold on the president's rule.

Venezuela's bolivar currency has tumbled more than 28 per cent against the U.S. dollar during the seven-week-old work stoppage and its international reserves have dipped since the crisis began. The strike has slashed oil output in the world's No. 5 petroleum exporter to a fraction of its normal levels.

Economists said foreign exchange controls would give the government some short-term breathing room, but the economy would suffer the longer the controls were maintained.

"This looks more like a knee-jerk reaction of theirs to the currency weakness," said Jose Cerritelli, a Bear Stearns Andean economist. "But in the long term, people look to escape the controls by taking their money out."

Finance Minister Tobias Nobrega said the government planned also to slash its 2003 budget by 10 per cent, or $2.2-billion (U.S.), extend a temporary bank debit tax through 2003 and continue with a domestic public debt swap to counter the economic damage of the strike.

The economic crunch has raised fears that Venezuela may default on its foreign debt later this year. But the Central Bank said the government would maintain the necessary operations to make those debt payments.

Mr. Chavez, a fiery populist who was elected in 1998 and survived a coup last April, has branded his foes as "terrorists" who are trying to topple him again through an economic coup and by draining hard currency from Venezuela. He has refused to quit and vows to defeat the strike.

Venezuela's Trade and Production Minister Ramon Rosales said the suspension of the exchange market aimed to halt what he called the "attack against our international reserves."

Venezuela's international reserves have fallen to $11.05-billion, a drop of 7.5 per cent so far this year. The government also has $2.85-billion in a rainy-day savings fund and insisted recently that hard currency levels were sufficient.

The bitter stalemate has raised international concern after the strike helped drive world oil prices to two-year highs. It has also disrupted domestic fuel and food supplies. But negotiations to break the deadlock have been stalled over the timing of possible elections. Former U.S. president and Nobel Peace Prize winner Jimmy Carter on Tuesday proposed to the government and the opposition a blueprint for elections that would also end the strike.

The currency trading shutdown is the latest government measure to combat the strike, now in its 52nd day. Many private businesses are still closed and the fuel shortages have forced Venezuelans to wait for hours outside gasoline pumps.

Mr. Chavez, who led a botched coup six years before his victory at the polls, has fought back, sending troops to seize control of oil installations and refineries and importing food and gasoline to offset shortages. In a first sign of a crack in the oil shutdown, some tanker pilots in the key western oil and shipping hub of Maracaibo went back to work this week.