Citgo request to use reserve gets no reply

NEW ORLEANS -- The federal Department of Energy has not responded to a request from Citgo Petroleum Corp. to tap the Strategic Oil Reserve.

Citgo's refineries in Lake Charles, La., and Corpus Christi get about 50 percent of their crude oil from Venezuela, where a national strike has shut off the flow of oil. The Tulsa, Okla.-based company formally asked the federal government in mid-December to allow use of oil in the reserve while the Venezuelan strike continues.

This week, Citgo spokeswoman Kate Robbins said "we have not received an official response."

Rep. Billy Tauzin, R-La., chairman of the House Energy and Commerce Committee, asked Energy Secretary Spencer Abraham last week to allow the tapping of the oil reserve.

Purchase of crude from alternate sources has allowed the refineries to continue production at their normal rate, Robbins said.

Citgo is a subsidiary of the Venezuelan national oil company, Petroleos de Venezuela SA. The Venezuelan company has a contract to provide Citgo with crude, but Robbins said the strike caused PDVSA to declare force majeure, meaning that a force out of the company's control made it impossible to deliver the oil.

The Lake Charles refinery produces about 320,000 barrels of oil a day. The Corpus Christi plant produces about 165,000 per day.

The oil reserve was established in the mid-1970s after a Middle East oil embargo. Oil is held in salt dome formations at two sites in southeast Texas and two in southwest Louisiana.

Defiant Chavez Says Venezuelan Strike Doomed - By Jason Webb - [Full Text] CARACAS, Venezuela (Reuters) - Venezuela began the New Year in a grim deadlock on Wednesday, as leftist President Hugo Chavez said that strikers who have cut off the nation's petroleum lifeblood were doomed to defeat. The 31-day-old general strike, led by business and unions and supported by most Venezuelans, according to polls, has reduced oil shipments from the world's fifth-largest oil exporter to a trickle in a bid to force the president to quit or call early elections. But Chavez, a former paratrooper jailed for a coup attempt in 1992 but elected in 1998, was his usual defiant self as he attended the inauguration of Brazil's new president.

"This is a coup d'etat disguised as a strike," he told reporters in Brasilia, where he arrived wearing a dark suit instead of the military-style uniform and red beret he often favors for populist rallies. "The coup-mongers have a date with defeat," said Chavez, who survived a coup attempt in April, dismissing the strike leaders as "a business elite and a corrupt union elite."

Venezuelan protesters fill a downtown highway to celebrate the arrival of the new year and to demand that President Hugo Chavez hold a referendum on his embattled presidency, in Caracas, Venezuela, Wednesday, Jan. 1, 2003. (AP Photo/Leslie Mazoch)

Tens of thousands of opposition supporters fired off fireworks and waved yellow-red-and-blue Venezuelan flags to see off 2002 on Tuesday night in Caracas, in a massive street party that was a show of determination to force Chavez out.

"We all want Chavez to go, preferably through elections," said Maria Pinto, whose family runs a clothing shop that has stayed shut for more than a month in support of the strike. Although the key to the strike is petroleum in a country so dependent on oil, many other businesses have closed in the wealthier parts of Caracas, giving the tropical city a permanent holiday air. The opposition accuses Chavez of abuse of authority, economic incompetence and corruption, accusing him of stirring class hatred with his inflammatory rhetoric and arming supporters in the slums. It says he wants to convert Venezuela -- oil-rich but marked by gaping differences between rich and poor -- into a communist dictatorship. Economic recession despite high oil prices has contributed to a slump in support for Chavez, whose term is due to run until 2007. But his popularity rating of just under 30 percent is still greater than that of any single opposition figure.

THREAT OF ECONOMIC DISASTER

Many of Venezuela's poor majority say Chavez, a man of mixed race and lower middle-class origins, is the only politician who has ever addressed their concerns. The strike, overwhelmingly backed by managerial staff from state oil giant PDVSA, threatens economic disaster for a country where 80 percent of exports and 50 percent of government revenues come from oil. But Chavez has fired PDVSA strike ringleaders and sent troops aboard halted oil tankers. Lines for gasoline hundreds of cars long are now a common sight in the country. The government says it hopes to get oil production back up to 1.2 million barrels per day over the next week, but the opposition says wells are pumping only about 150,000 bpd, a twentieth of the normal rate.

Chavez is grateful to Brazil's new leader, Luiz Inacio Lula da Silva, like him a left-winger, for approving the sale of Brazilian to Venezuela. It was the first time the country had imported such fuel in 40 years. World oil markets, already fretting about a possible war in Iraq, have been seriously unnerved by the strike in Venezuela, which normally supplies about 13 percent of U.S. crude imports. Prices are near two-year highs.

The opposition hopes to hold a nonbinding referendum on Chavez's rule on Feb. 2, but he has said he will pay no attention to the results. He is sticking to a date in August, halfway through his current term, when he says the constitution allows for a binding referendum on his mandate. The strike has begun to fray at the edges, and smaller firms and restaurants are beginning to open again in Caracas. Despite signs of frustration in the opposition ranks, leaders have vowed to pile up the pressure against Chavez in January with bolder street protests, including a possible march on the Miraflores presidential palace. Miraflores has been off-limits to protesters since a coup was triggered in April by a demonstration that ended with 19 people shot to death by gunmen and more than 100 injured. Both government and opposition blamed each other for the killings. Chavez says his reforms, which include a nationalistic oil strategy, increased state intervention in the economy and cheap credits and land grants for the poor, are aimed at eliminating minority privileges and distributing oil wealth more fairly. [End]

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