www.forbes.com Reuters, 01.19.03, 6:41 PM ET

CARACAS, Venezuela (Reuters) - Crude oil exports from strike-bound Venezuela fell by 45,000 barrels per day (bpd) to 480,000 bpd last week, or one sixth of the pre-strike level, shipping sources said Sunday.

Crude exports fell to 480,000 bpd in the week to January 18, versus 525,000 bpd in the previous week, according to calculations made by Reuters based on data from shipping sources and state oil company Petroleos de Venezuela (PDVSA). One shipper saw exports rising next week as he expected more pilots to be available in the western Lake Maracaibo. Another agent said dock workers were abundant in main eastern ports, although the strike has disabled many automated systems and loading rates have fallen from 40,000 barrels an hour to just 6,500 in one port.

The OPEC nation exported approximately 2.7 million bpd of crude oil and refined products before the seven-week-old strike, aimed at forcing President Hugo Chavez to resign.

The strike draws support from many of PDVSA's 37,000 workforce in oilfields, refineries, tankers and ports. But PDVSA President Ali Rodriguez has sacked some 1,500 absentee workers, split the company into two operating units, and hired replacement staff to restore operations.

Both government and opposition figures show oil output doubling last week, although government data show current flows at 1.2 million bpd, while strikers peg it at 650,000.

Only ships chartered by PDVSA and its U.S. subsidiary Citgo have been loading cargoes for export because foreign customers are concerned about insurance risks associated with uncertified staff in the terminals.

Foreign oil companies have commissioned an audit of Venezuelan ports to be conducted this week which will determine whether their loadings can resume.

www.cnn.com Chavez vows more raids on industries that support strike Sunday, January 19, 2003 Posted: 5:59 PM EST (2259 GMT)

New army chief Jorge Garcia Carneiro helps Venezuelan President Hugo Chavez prepare for his weekly TV and radio show Sunday.

CARACAS, Venezuela (CNN) -- Embattled Venezuelan President Hugo Chavez appointed two retired generals to key posts Sunday as an opposition-led oil industry strike, intended to force Chavez from office, entered its eighth week with no end in sight.

Chavez also threatened military raids on food producers who participate in the strike, which has crippled oil output and brought Venezuela's economy to a standstill. The country is facing severe shortages of gasoline, flour and bottled drinks, including milk, soft drinks and water.

"There are some businesspeople who have thought about it, who have made their products available to the consumers," Chavez said during his weekly television and radio show "Hello President." "Those who refuse, those who resist, can rest assured that today, tomorrow or beyond, we will search their warehouses, their storerooms. If they don't want to open, we will open them."

The statement comes after the national guard, on Chavez' orders, took over a Coca-Cola distribution plant Friday in the state of Carabobo. Officials said the army will turn over the products it seized to the state consumer protection agency, Indecu, which is then to distribute Coca-Cola to stores.

The move came after the country's superior court of agricultural affairs ruled that the government can take over facilities necessary to keep basic goods flowing.

Chavez said during the program Sunday that he was appointing retired Gen. Lucas Rincon as his new interior minister and Gen. Jorge Garcia Carneiro as the new chief of the army. Both men are considered loyal generals who have proven their staunch support for Chavez.

Rincon, who retired as defense minister in July, was also a former army chief of staff. Carneiro replaces Gen. Julio Garcia, who was named to the post in April after Chavez withstood a military coup attempt.

-- CNN producer Penny Mannis and correspondent Diana Muriel contributed to this report.

www.alertnet.org Jan 2003 22:10

By Tom Ashby

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

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.

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 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.

Calling himself the "oil commander," the former paratrooper 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.

El Palito was already running 105,000 bpd of crude oil, and aimed to start a key gasoline producing unit, the catalytic reformer, on Wednesday.

At Amuay-Cardon, with 940,000 bpd capacity the largest oil refinery in the western hemisphere, crude processing would reach 150,000 bpd by Monday.

"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.

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.

Opposition elements were organizing meetings with the financial community abroad to spread disinformation about the company, he said.

news.ft.com By Andy Webb-Vidal in Caracas Published: January 19 2003 21:01 | Last Updated: January 19 2003 21:01

US corporations with interests in Venezuela are facing increasing risk of government intervention or even expropriation, as President Hugo Chávez moves to confront a general strike and consolidate his position, business leaders warned on Sunday.

The warning comes after the military raided a Coca-Cola subsidiary bottling plant on Friday and distributed the soft drink to the poor to help ease shortages of staple goods arising from a six-week-old protest stoppage by opponents of Mr Chávez.

Mr Chávez said orders had been issued to military units to carry out similar "legal" actions against companies deemed to be hoarding essential foodstuffs. "Those who attempt to deprive the people of food and then complain that Chávez is arbitrary are traitors to the nation," he said.

US companies with operations in Venezuela include food group Kraft, Procter & Gamble, and Cargill, the agribusiness. Business leaders are watching to see whether the raid was intended as a gesture aimed at persuading other companies to lift the economically crippling strike, or whether the move marks a Cuban-inspired leftward shift in Mr Chávez's policies.

Either way, the difficult relationship between the government and private businesses look set to deteriorate. "Tremendous damage is being done to Venezuela's reputation, countries in Latin America have long had to wrestle with the banana republic, tin-horn dictatorship image from the 19th century," said Antonio Herrera, vice-president of the Venezuelan-American Chamber of Commerce.

"Venezuela had to a great degree overcome this image, but through a single event on the part of a small group of people world opinion will now start thinking of Venezuela in terms of countries that aren't quite civilised," Mr Herrera said.

The move against the Coca-Cola distributor is likely to add urgency to a nascent diplomatic initiative by a six-nation group aimed at finding a negotiated resolution to the political deadlock between the government and opposition groups.

Brazil, Chile, Mexico, Portugal, Spain and the US last week agreed to form a "group of friendly nations" to bolster an existing mission by the Organisation of American States.

Colin Powell, US secretary of state, and some of the foreign ministers from the five other "friendly nations" are expected to hold talks in Washington this week. Irked over the inclusion of the US in the group, Mr Chávez said his government could walk away from the OAS talks.

Mr Chávez met Luiz Inácio Lula da Silva, Brazil's president, at the weekend to seek support to widen the group to include Russia and France. Celso Amorim, Brazil's foreign minister, said membership of the group would not be broadened for the time being.

www.forbes.com Reuters, 01.19.03, 2:37 PM ET

CARACAS, Venezuela (Reuters) - Venezuelan President Hugo Chavez, battling a 7-week-old opposition strike, said Sunday that oil output had recovered to almost 1.2 million barrels per day, versus a top capacity of 3.2 million.

He said flows were rising fast in the east of the country, where current flows of 500,000 bpd would reach 1.3 million bpd by the first half of February.

In the west, he pegged output at 600,000 bpd, with 80,000 barrels per day from the southern fields.

Striking employees of the state-run Petroleos de Venezuela, who aim to force Chavez to resign by cutting off his economic lifeline, estimated output at 649,000 bpd on Sunday.