www.alertnet.org NEWSDESK   20 Jan 2003 00:36

(Updates with opposition reaction in paragraph 7, 13, 18)

By Tom Ashby

CARACAS, Venezuela, Jan 19 (Reuters) - Venezuelan President Hugo Chavez said on Sunday that he was "winning the oil war" against striking workers, restoring crude flows, restarting refineries and reopening ports crippled by a seven-week-old stoppage.

But the leftist leader said he faced resistance from "saboteurs," who cut off gasoline supplies to Caracas, hacked into computers controlling oil facilities and finances and persuaded some trading partners not to deal with the South American nation.

The oil industry is the focus of a power struggle between Chavez, who blames corrupt elites for trying to stop his "beautiful revolution", and opposition groups who see him leading the country to Cuban-style communism.

Crude oil output, which fell from three million barrels per day (bpd) to about half a million earlier this month, had recovered to almost 1.2 million bpd by Sunday, Chavez said.

"We are winning the oil war... We could reach two million barrels per day before the end of the month," he said during his weekly television and radio show "Hello President".

Striking employees of the state-owned Petroleos de Venezuela (PDVSA), who want to force Chavez to resign by cutting off his economic lifeline, estimated output was half the volume stated by Chavez at 650,000 bpd.

"Despite the figures given by Chavez, the oil industry is still paralyzed," said strike leader Juan Fernandez.

Calling himself the "oil commander," Chavez said he had ordered the Armed Forces to step up surveillance of the industry, which was the world's fifth largest exporter before the strike.

"If we have to use our last soldier to prevent more damage being done to the oil company, which is the economic heart of Venezuela, we will do it."

The government has sacked some 1,500 PDVSA employees, and is using retired staff, unemployed workers, the military and some foreigners to restore operations.

Strikers blame unqualified staff for a spate of accidents, including 38 oil spills totaling 4,500 barrels and seven fires in oil installations since the strike began on Dec. 2.

REFINERY RESTART

Chavez said two oil refineries paralyzed by the strike, El Palito and Amuay-Cardon, had begun to process crude oil and would together process 250,000 bpd later this week.

He said El Palito was already running 105,000 bpd of crude oil, but this was denied by El Palito's maintenance manager Giovanni Dixy, who said an attempted restart had failed.

At Amuay-Cardon, at 940,000 bpd capacity the largest oil refinery in the western hemisphere, Chavez said crude processing would reach 150,000 bpd by Monday from 50,000 now.

"That should relieve fuel supply, especially in the west," Chavez said.

Of 20 state-owned oil tankers, 16 were now operating normally, including eight crude carriers to supply Venezuelan-owned refineries in the United States, Chavez said.

Some foreign companies, which normally buy the bulk of Venezuela's oil exports, were still reluctant to send tankers to its ports, he added.

Shipping sources said crude exports fell slightly last week to 480,000 bpd, versus a pre-strike level of 2.7 million bpd.

Lines of cars and buses stretched for miles outside service stations in the capital on Sunday, after two days without any deliveries by road tankers.

"Until the refineries start working we will depend on imports of gasoline. We will be subject to shipping delays, sabotage to valves and pipelines," Chavez said.

Chavez said "saboteurs and traitors" had hacked into PDVSA's computer system, siphoning money out of company accounts illegally.

He said he would sue Intesa, a U.S. controlled information services company, for failing to keep computers running and withholding key passwords.

"What we have done is to cut off the systems and operate manually as we did 20 years ago," Chavez said.

"This is an electronic war... We are nationalizing the brains of PDVSA because they are in the hands of traitors and saboteurs," Chavez said.

Energy and Mines Minister Rafael Ramirez, who also appeared on the show, said a tanker carrying 1.5 million gallons of gasoline to Venezuela was diverted to another country after striking workers shed doubts on PDVSA's ability to pay.

abcnews.go.com — By Pascal Fletcher

CARACAS, Venezuela (Reuters) - Venezuelan President Hugo Chavez on Sunday named two loyal generals to top security jobs and said he was "winning the war" against opposition strikers who have crippled the country's vital oil industry for seven weeks.

The left-wing president, who has used troops to counter the strike, ruled out talks with opposition leaders who are trying to force him to resign and hold early elections.

Hardening his stance against the strikers, he repeated a threat to withdraw from peace talks with his foes being brokered by the Organization of American States. The talks have made little progress in more than two months.

"We are winning this oil war," Chavez said, speaking on his weekly "Hello President" television and radio show.

The strike has slashed output in the world's No. 5 petroleum exporter. It has also caused serious shortages of gasoline, cooking gas and some food items, sparking looting in some provincial towns and villages.

But Chavez, a former paratrooper who was elected in 1998 and survived a coup last year, said his government was making progress in restarting strike-bound oil fields and refineries.

Chavez named Gen. Lucas Rincon, a former defense minister and ex-armed forces chief, as interior and justice minister and Gen. Jorge Garcia Carneiro, as the new chief of the army -- the most powerful branch of the armed forces.

Both generals are close allies of Chavez, who has used the armed forces to take over strike-hit oil installations and, more recently, to raid food plants he accuses of deliberately hoarding goods to support the strike.

Since a short-lived coup against him in April, the president has purged his opponents from the military and is now doing the same in the strategic oil industry. Some 2,000 striking oil executives and employees have been fired.

In a move that drew howls of outrage from Chavez's foes, National Guard troops on Friday broke into two private drinks manufacturing facilities. One was a local bottling affiliate of Coca-Cola Co. and the other a storage plant belonging to Venezuela's biggest private company, Empresas Polar.

CUBA'S CASTRO PRAISES CHAVEZ

Chavez on Sunday accused a U.S.-controlled technology company, Intesa, of joining what he called a campaign of sabotage by the opposition strikers in the state oil giant PDVSA.

Intesa, 60 percent of which was owned by the U.S. company Science Applications International Corporation (SAIC), had been responsible for running PDVSA's computer systems which Chavez said were deliberately blocked and disrupted in the strike.

"The Intesa executives didn't want to cooperate ... We'll have to rescind that contract ... We're nationalizing the brains of our oil industry," the president said.

Opposition leaders said Friday's raids against the drinks firms were an attack on private property. They accuse Chavez of trying to introduce Cuba-style communism in Venezuela.

Cuban President Fidel Castro on Sunday defended his friend and political ally Chavez, praising him as a "firm, good and intelligent man who is not going to abandon his people."

Speaking in the eastern Cuban city of Santiago de Cuba, Castro said Chavez's striking opponents were being defeated.

But the Venezuelan strikers on Sunday vowed to continue their protest shutdown, extending it into an eighth week.

The strike at PDVSA has jolted world oil markets and cut off exports to the United States, which normally imports over 13 percent of its oil from Venezuela.

Rejecting opposition reports that the strike-hit oil industry was still in the doldrums, Chavez predicted that output could reach 2 million barrels per day (bpd) -- two thirds of pre-strike levels -- by the end of January.

He put current production at close to 1.2 million bpd. Striking PDVSA executives say output is around half of that.

Chavez acknowledged that availability of gasoline was still "critical," although he promised this would improve. Long lines formed outside gas stations across the country.

"We can't dialogue with terrorists," Chavez said, adding his government was considering quitting the talks with opposition negotiators chaired by OAS Secretary General Cesar Gaviria. The negotiations had been due to resume Monday.

Latin American leaders this week created a six-nation "group of friends" to support Gaviria's efforts to solve Venezuela's political crisis. The group comprised the United States, Brazil, Chile, Mexico, Spain and Portugal.

But Chavez has said the group should be expanded to include nations such as China, Russia, Cuba and France. (Additional reporting by Nelson Acosta)

www.alertnet.org 19 Jan 2003 23:45

CARACAS, Venezuela, Jan 17 (Reuters) - Foes of Venezuela's embattled President Hugo Chavez on Sunday extended for a 50th day a protest strike aimed at forcing the leftist leader to resign and call immediate elections in the world's fifth largest oil exporter.

The opposition shutdown, which began on Dec. 2, has slashed Venezuela's vital petroleum production, hiked oil prices and inflamed the feud over the populist ex-paratrooper's rule. Before the strike, Venezuela supplied about one sixth of U.S. oil imports.

"Let's carry on ... not one step backwards," anti-Chavez business leader Jose Luis Betancourt told a news conference.

The anti-Chavez leaders, including rebel managers at state oil firm PDVSA have vowed to keep up the shutdown until the president resigns. But the tough-talking former paratrooper has dismissed calls for early elections. He rejects charges from foes that his government has been marred by corruption, economic mismanagement and authoritarian rule.

Chavez, who was elected in 1998 and survived a coup in April, has promised to defeat the strike, which he dismisses as an attempt to oust him through oil industry sabotage. Oil sales provide about half of government revenues.

www.sfgate.com

STEPHEN IXER, Associated Press Writer Sunday, January 19, 2003

(01-19) 16:35 PST CARACAS, Venezuela (AP) --

President Hugo Chavez on Sunday threatened to order more raids on striking private food producers and warned the government may abandon negotiations with opponents trying to force him from office.

Meanwhile, thousands of Venezuelans with roots in Italy, Spain, Mexico, Brazil, Portugal and other countries marched for peace, waving the flags of their homelands and Venezuela. Some carried signs that read "liberty" and "union" in six languages.

"I've never seen the country so divided," said Jose Lopes, 60, a bookstore owner who immigrated to Venezuela from Portugal as a teenager. "We don't want to leave but if Chavez doesn't leave it's a possibility."

Opponents accuse the 48-year-old president of running roughshod over democratic institutions and wrecking the economy with leftist policies.

A combination of opposition parties, business leaders and labor unions called for a general strike on Dec. 2 to demand Chavez accept the results of a nonbinding referendum on his rule.

Venezuela's National Elections Council scheduled the vote for Feb. 2 after accepting an opposition petition, but Chavez's supporters have challenged the referendum in court. The Supreme Court is expected to rule on the issue soon.

Chavez, whose six-year term ends in 2007, insists his foes must wait until August -- or halfway through his six-year term -- when a recall referendum is permitted by the constitution.

The strike has brought Venezuela's economy to a standstill, causing shortages of gasoline, food and drink, including bottled water, milk, soft drinks and flour.

Local producers insist they are still making basic foodstuffs but that fuel shortages and lack of security for their transport workers have hampered deliveries.

"Some businessmen have reflected and have started to open their factories," Chavez said during his weekly television and radio show. "Those who refuse, who resist, well, be sure that today, tomorrow, or after we will raid your warehouses and stockpiles."

On Friday, National Guard soldiers seized water and soft drinks from two bottling plants. One was an affiliate of Coca-Cola, the other belonged to Venezuela's largest food and drinks producer, Empresas Polar.

Vice President Jose Vicente Rangel on Sunday rejected U.S. Ambassador Charles Shapiro's criticism of the raids, which he said affected U.S. interests in Venezuela. Shapiro also questioned their legality.

"Ambassador, with all due respect, you are not an authority in this country," Rangel said Sunday while speaking to supporters in Venezuela's Margarita Island.

Bilateral "relations have to be on an equal plain of mutual respect. This is not a protectorate, it is not a colony," Rangel said.

Chavez also warned the government would walk away from negotiations sponsored by the Organization of American States if the opposition continued seeking his ouster through what he calls unconstitutional means.

"We are carefully evaluating the possibility that our representatives will leave the (negotiating) table," he said. "We don't talk with terrorists. We are willing to talk with any Venezuelan within the framework of the constitution."

The talks, which began in November, have yielded few results. Six countries -- Brazil, Chile, Mexico, Portugal, Spain and the United States -- have begun an initiative called "Friends of Venezuela" to support the negotiations.

The strike is strongest in Venezuela's oil industry, previously the world's fifth-largest exporter.

Oil production has dwindled to 800,000 barrels a day, compared with the 3 million barrels a day the country usually produces, according to the government. Strike leaders put the figure at 400,000 barrels a day.

Chavez, who has fired more than 1,000 strikers from the state oil monopoly, said Sunday that production could be restored to 2 million barrels a day by the end of the month.

But Chavez acknowledged that gasoline shortages have increased. He blamed the difficulties on "sabotage" by strikers and delayed gasoline imports. He also promised to reinforce troop presence at oil installations and said 60 gasoline trucks were on their way to Caracas, the capital, on Sunday.

"Keep rationing gasoline," Chavez urged listeners.

Besides the factory raid, troops have seized striking oil tankers and kept strikers out of oil installations. Five people have died in politically related violence since the strike began.

Also Sunday, Chavez appointed retired Gen. Lucas Rincon as his interior minister, replacing Diosdado Cabello, who was named infrastructure minister last week. Rincon's appointment comes despite his role in April's failed coup and his later resignation as defense minister.

Rincon announced to the world that Chavez resigned after 19 people died during an opposition march on the presidential palace. Loyal soldiers restored Chavez to power two days later after an interim government dissolved the constitution.

Chavez also appointed Gen. Jorge Garcia Carneiro as commander of Venezuela's army, replacing Gen. Julio Garcia Montoya.

www.forbes.com Reuters, 01.19.03, 6:45 PM ET

CARACAS, Venezuela, Jan 17 (Reuters) - Foes of Venezuela's embattled President Hugo Chavez on Sunday extended for a 50th day a protest strike aimed at forcing the leftist leader to resign and call immediate elections in the world's fifth largest oil exporter.

The opposition shutdown, which began on Dec. 2, has slashed Venezuela's vital petroleum production, hiked oil prices and inflamed the feud over the populist ex-paratrooper's rule. Before the strike, Venezuela supplied about one sixth of U.S. oil imports. "Let's carry on ... not one step backwards," anti-Chavez business leader Jose Luis Betancourt told a news conference.

The anti-Chavez leaders, including rebel managers at state oil firm PDVSA have vowed to keep up the shutdown until the president resigns. But the tough-talking former paratrooper has dismissed calls for early elections. He rejects charges from foes that his government has been marred by corruption, economic mismanagement and authoritarian rule.

Chavez, who was elected in 1998 and survived a coup in April, has promised to defeat the strike, which he dismisses as an attempt to oust him through oil industry sabotage. Oil sales provide about half of government revenues.