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Chavez: Venezuela Oil Industry Rebounding

January 7, 2003

CARACAS, Venezuela (AP) _ President Hugo Chavez’s government said Monday it was steadily reviving the world’s fifth-largest oil exporting industry a month into a strike led by Venezuela’s opposition.

Oil Minister Rafael Ramirez said production was about 800,000 barrels a day and would reach more than 1 million barrels a day by the end of the week. Venezuela normally produces 3 million barrels a day.

Gasoline imports were helping restock domestic supplies after weeks of long gas lines, Ramirez said. Shipments totaling 1.2 million barrels of gasoline were arriving from the United States, Trinidad and Tobago and Russia, Ramirez said.

The stakes are crucial in Venezuela, a top supplier to the United States, and a member of the Organization of Petroleum Exporting Countries.

About 35,000 workers at the state owned oil monopoly Petroleos de Venezuela S.A. joined a general strike called Dec. 2 to demand that Chavez hold a nonbinding referendum on his rule Feb. 2.

But Chavez has refused and invited his opponents to call a binding referendum as allowed by Venezuela’s constitution in August, or halfway into Chavez’s six-year term.

The standoff has helped send international oil prices to two-year highs.

Chavez vowed to use the strike to tighten government control over PDVSA and make it a trimmer, more profitable corporation. He has appointed loyal board members at the semiautonomous company and fired almost 300 executives.

PDVSA President Ali Rodriguez said last week that the company would split into eastern and western divisions to eliminate the dissident and costly Caracas-based bureaucracy. He also said the government planned to cut some 6,000 jobs in Caracas, a center of anti-Chavez resistance, and the western oil town of Maracaico.

Rodriguez said he would personally manage PDVSA while managers Felix Rodriguez and Luis Marin report to him and handle separate PDVSA operations in eastern and western Venezuela _ bypassing central and dissident PDVSA bureaucracy and tightening government control.

Ramirez said the government was contemplating other actions, including sales of non-essential assets, including the possible sale of Venezuela’s wholly-owned U.S. subsidiary Citgo.

Chavez on Sunday branded the PDVSA strikers as ``traitors″ and said they should be tried for jeopardizing the nation’s security. Oil accounts for almost half of government revenue.

Chavez said exports have reached 1.5 million barrels a day, compared to 2.5 million before the strike. Analysts said the figure was unlikely.

``Frankly, we don’t see any evidence,″ said Ed Silliere, vice president of risk management at Energy Merchant LLC in New York. ``It’s impossible to believe. It’s farcical.″

But local industry sources, who spoke on condition of anonymity, said the government was making progress. They estimated exports at about 500,000 barrels a day and production at about 400,000 barrels a day _ double the lowest levels during the strike.

Government sympathizers demanded that Attorney General Isaias Rodriguez prosecute strike leaders, including the heads of Venezuela’s largest business and labor confederations. The strike has cost the economy billions of dollars and caused food shortages.

``Justice!″ ``Justice!″ several hundred protesters, including ruling party legislators, chanted outside Rodriguez’s office. ``Work or quit. Our patience is running out!″ one sign read.

Protesters also demanded swift justice in the slayings of two Chavez supporters during a melee at an opposition rally on Friday.

Oscar Gomez Aponte, 24, and Jairo Gregorio Moran, 23, were killed during the fracas involving Chavez supporters, Chavez opponents, military police, National Guardsmen and Caracas city police. At least 78 people were injured.

Opposition leaders Chavistas started the violence by attacking their march with rocks, bottles and, later, guns.

Chavez’s government accused city police, who report to Caracas’ opposition mayor, for the deaths. Police Chief Henry Vivas said his officers don’t have 40mm-caliber handguns used to kill the two men.

Opposition leaders seethed Monday, saying Chavez didn’t pay so much attention when three people were killed and 28 were wounded at an opposition rally Dec. 6. A lone gunman was arrested but hasn’t been charged.

The anger also underscored bitterness over the unsolved slayings of 19 people during an opposition march on the presidential palace April 11. Both sides blame each other for the bloodshed, which helped trigger a short-lived coup against Chavez. Investigations have produced little progress.

Chavez’s government has ``good dead people and bad dead people,″ said Antonio Ledezma, leader of the opposition Democratic Coordinator movement.

Cesar Gaviria, secretary general of the Organization of American States, condemned Friday’s violence and impunity that has marked earlier political violence, saying it jeopardized Venezuelan democracy.

Gaviria, mediating talks between the two sides, said negotiators Tuesday would discuss a ``truth commission″ to look into the April deaths.

In Washington, U.S. State Department spokesman Richard Boucher urged both sides to back Gaviria and ``refrain from further violence.″ He said that ``the government of Venezuela has a special obligation to protect all Venezuelans as they exercise their rights.″

About 20,000 people attended an opposition protest in Los Teques, 15 miles southwest of Caracas. Pro- and anti-government protesters threw rocks at each other in the western city of Barquisimeto.

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