/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/030122.mbx T R O U B L E D C O M P A N Y R E P O R T E R L A T I N A M E R I C A Wednesday, January 22, 2003, Vol. 4, Issue 15 Headlines A R G E N T I N A BANCO GALICIA: Creditors Expected Accept Debt Deal Soon REPSOL YPF: To Start Drilling Wells Next Month * World Bank Set to Grant Argentina Critical Debt Breathing Room * IMF Updates Transitional Credit Support for Argentina B E R M U D A GLOBAL CROSSING: Hutchison Gets Takeover Approval B R A Z I L BCP: Gloomy, Uncertain Outlook Persists ELETROBRAS TERMONUCLEAR: Big Debts Prompt State Finances Review C H I L E SAESA: Chilean Investments Consolidated, Static for 2003 C O L O M B I A ELECTROTOLIMA: Faces Dissolution if Rescue Plans Fail D O M I N I C A N R E P U B L I C COGENTRIX: Refuses To Enter Into Renegotiation Talks UNION FENOSA: May Realign Interest to Market Rates On $200M Loan M E X I C O GRUPO MEXICO: Monday's Wage Dispute Talks Yield No Solution SANLUIS CORPORACION: Fourteen Banks Extend $234M Loan UNEFON: Conflict With Nortel May Hamper Expansion Plans T R I N I D A D & T O B A G O BWIA: Consultant Blasts Accounting As Similar to Enron's U R U G U A Y GALICIA URUGUAY: Analyst Expects June Reopening V E N E Z U E L A PDVSA: To Restart Largest Refinery Soon PDVSA: Head Calls On Workers To Halt Strike SINCOR: Strike Drops Output To Ten Percent of Capacity - - - - - - - - - - ================= A R G E N T I N A ================= BANCO GALICIA: Creditors Expected Accept Debt Deal Soon ------------------------------------------------------- Negotiations between Argentine bank Banco Galicia and its international creditors are likely to close in February or March, Business News Americas indicates, citing a Galicia spokesperson. According to the spokesperson, Galicia is negotiating debts totalling US$800 million with about 200 international banks, whose names were not revealed. Rafael Ber, a partner at local capital markets consultancy Argentine Research, suggested it would be "difficult" for the bank to close the negotiations successfully but in the end the creditors will accept Galicia's demands to renew maturities and reduce interest rates. Banco Galicia is one of the banks that suffered most from the meltdown of the Argentine financial system at the end of 2001 and early 2002. In April last year, Galicia was forced to sell a major part of its loan portfolio for ARS400 million (US$123 million) to shore up its liquidity base. Banco Galicia, the main asset of Argentine financial group Grupo Financiero Galicia, reported a third quarter loss in 2002 of ARS339 million, compared to an ARS119-million loss in 3Q01. CONTACT: BANCO DE GALICIA Y BUENOS AIRES S.A. Phone (54-11) 6329-6430 Fax (54-11) 6329-6494 Email: www.e-galicia.com GRUPO FINANCIERO GALICIA S.A. Teniente General Juan D. Peron 456, Piso 3 1038 Buenos Aires, Argentina Phone: (54 11) 4343 7528 / 9475 Home Page: http://www.gfgsa.com Contacts: Eduardo J. Escasany, Chairman and CEO Sergio Grinenco, CFO, Banco de Galicia y Buenos Aires REPSOL YPF: To Start Drilling Wells Next Month ---------------------------------------------- Spanish oil company Repsol YPF is expected to start drilling five of eight proposed wells in 30 days in the Llancanelo lagoon in Argentina's Mendoza province after obtaining permit on Friday from the provincial government, reports Business News Americas. Mendoza province, which will receive some 60,000 pesos a month in royalties, blocked the project in 2000 due to environmental concerns about the impact of drilling on the lagoon's ecosystem. As a condition of the permit, a team of government inspectors will monitor the environmental impact of the project, and Repsol will be required to take measures to protect waterways from being contaminated. A Repsol YPF source confirmed that the Company will invest US$7 million (ARS22.4 million) to drill the five wells. Meanwhile, the Mendoza government refused to give Repsol permit to drill the other three wells over fears of contamination by their proximity to subterranean waterways. CONTACT: REPSOL YPF SA Head Office Paseo de la Castellana 278 28046 Madrid Spain Tel +34 91 348 81 00 Fax +34 91 348 28 21 Telex 48162 RESOLE Web http://www.repsol.com Contact: Alfonso Cortina de Alcocer, Chairman Jose Vilarasu Salat, Vice Chairman Antonio Hernandez, Vice Chairman * World Bank Set to Grant Argentina Critical Debt Breathing Room ---------------------------------------------------------------- The World Bank may lend US$1 billion to Argentina after the International Monetary Fund approves a debt referral plan, Bloomberg reports, citing bank president James Wolfensohn. Mr. Wolfensohn added that they "will immediately move", once the plan gets the IMF's approval. He said that the bank is ready to loan US$600 million through a "head of households" program, and US$400 million for family assistance and education aid. The report indicated that the IMF may sign an agreement on Thursday to allow Argentina to roll over debts coming due within the next six months. The country has a US$6.6 billion in debt coming due on August to the IMF, another US$4.4 billion due to the World Band and the Inter-American Development Bank (IADB). In order to be allowed to defer payment to the IMF, the country is required to achieve a surplus target of 2.5 percent of gross domestic product and reduce the local currency and other scrip in circulation, according to local daily Clarin, without revealing its source of the information. Another local paper, La Nacion, said Cabinet leader Alfredo Atanasof had indicated that Argentina may announce another emergency decree to increase energy rates in the next few days. The announcement would be the third of its kind as the government is under pressure from the IMF and the utility companies who say that the rates hike is badly needed. The courts had blocked earlier decrees, and this one is not likely to be exempted. Clarin reported that this decree may be blocked by a national administrative court as well. The report indicated that residential power rates may rise 9 percent and gas rates by 7.2 percent, effective in February. A slightly higher increase may be expected for industries. Utility companies in the country had suffered from a severe currency devaluation after the country lost its credit lines to multilateral lenders due to its defaulting on a record of US$95 billion of bonds in December 2001. Last month, the World Bank had stopped the funding for social programs after the country failed to pay US$830.7 million in loans. Argentina also failed to make a US$680 million payment due to the IADB last week. * IMF Updates Transitional Credit Support for Argentina ------------------------------------------------------- Press Release No. 03/06 January 17, 2003 International Monetary Fund 700 19th Street, NW Washington, D.C. 20431 USA Mr. Horst K”hler, Managing Director of the International Monetary Fund (IMF), confirmed today [Friday] he is recommending to the IMF's 24-member Executive Board approval of transitional financial support for Argentina. In transmitting to the Executive Board the Argentine authorities' letter of intent and memorandum of economic policies, which is included in the IMF staff report for the transitional program in 2003, Mr. K”hler made the following statement: "The Article IV discussion on January 8 demonstrated the complexity of the situation in Argentina as we - staff, management and the authorities - have strived to secure a policy framework that achieves durable macroeconomic stability, supports the resumption of growth, and improves the investment climate. The appraisal in the Article IV consultation report is candid in stressing that difficulties in securing a political consensus in Argentina have been a core problem impeding progress toward a program. That said, we all take note that, in recent months, the economic situation has somewhat stabilized, though it remains fragile. "The government has now developed a series of policy commitments that could, if implemented consistently and credibly, build a bridge to a comprehensive program to be negotiated with a new government after the elections. These policies provide the basis for a transitional program that will seek to preserve macroeconomic stability through the course of the upcoming elections and reduce the risk of policy reversals. Equally important, this program will also provide a framework for the multilateral development banks to support social programs in Argentina, which are key to protect the vulnerable groups from the adverse effects of the crisis. "But even a transitional program involves exceptional risks to the Fund which are outlined with appropriate care and depth in the staff report. They relate to the fragility of the macroeconomic policy framework and the political challenges to implementation. In considering this request, it is important that the Board weigh these risks carefully, and their implications for Argentina, the region, and for the Fund itself. "I have decided to recommend the approval of this arrangement as a demonstration of a good faith effort of the international community in favor of the people of Argentina. I would also like to assure the Argentine people that the Fund will do its part to make this program succeed. The key to a durable solution to the present difficulties lies, of course, in the actions that Argentina takes. I hope that our contribution will catalyze a cohesive effort on the part of the Argentine authorities, the provinces, legislators and civil society to fully implement this transitional program." CONTACT: IMF EXTERNAL RELATIONS DEPARTMENT Public Affairs Tel: 202-623-7300 Fax: 202-623-6278 Media Relations Tel: 202-623-7100 Fax: 202-623-6772 ============= B E R M U D A ============= GLOBAL CROSSING: Hutchison Gets Takeover Approval ------------------------------------------------- Hong Kong mobile carrier Hutchison Telecom received permission from the European Commission to go ahead with its plans to purchase bankrupt communications network, Global Grossing, according to Reuters. The required permission was granted on Monday. Global Crossing, based in Bermuda, filed for bankruptcy protection in January last year, facing total debts of US$12.4 billion. The company, which was founded in 1997 and has a fiber- optic network linking 27 countries, was sold to Hong Kong's Hutchison Whampoa Ltd and Singapore Technologies Telemedia Pte in August. The EC approved the deal after the company's customers and rivals offered no complaints. Earlier this month, the Bermuda Supreme Court also approved of the deal. According to the report, the new company will effectively discharge the debts by giving cash to some creditors and shares in the new company to others. Some lenders, such as banks, are expected to receive at least 20 percent back in cash. CONTACT: GLOBAL CROSSING Press: Becky Yeamans, +1-974-410-5857, Email: Rebecca.Yeamans@globalcrossing.com Tisha Kresler, +1-973-410-8666 Email: Tisha.Kresler@globalcrossing.com Analysts/Investors: Ken Simril, +1-310-385-5200 Email: investors@globalcrossing.com =========== B R A Z I L =========== BCP: Gloomy, Uncertain Outlook Persists --------------------------------------- The future of BCP still hangs in the air. According to Business News Americas, the shareholders of BSE are in talks with an undisclosed party to sell their interests in BCP's sister company. Local media have long singled out Telecom Americas, controlled by Mexico's America Movil, as buying its way into Sao Paulo through BCP. However, there is no indication that BCP is affected by the BSE talks. Bellsouth and Verbier Communications, a unit of local Banco Safra controls both BCP and BSE, also known as BCP Nordeste. BCP defaulted on US$430 million of debt and BSE is having trouble making payments on US$76 million, after a 37% decline in the real this year drove up financing costs for Brazilian companies. CONTACT: BCP S.A. Rua Fl›rida, 1970 4o andar Sao Paulo - SP Tel: 55 11 5509-6428 Fax: 55 11 5509-6257 Home Page: http://www.bcp.com.br BELLSOUTH CORPORATION 1155 Peachtree St. NE Atlanta, GA 30309-3610 Phone: 404-249-2000 Fax: 404-249-5599 Home Page: http://www.bellsouth.com/ Contacts: Investor Relations Phone (US): 800.241.3419 Fax: 404.249.2060 E-mail: investor@bellsouth.com ELETROBRAS TERMONUCLEAR: Big Debts Prompt State Finances Review --------------------------------------------------------------- The Brazilian government said it would review the finances of state nuclear power company Eletrobras Termonuclear (Eletronuclear) after the Eletrobras' unit incurred debts totaling BRL1 billion. "We believe it is reasonable to remunerate nuclear power in line with what is reasonable. We cannot let a company operate in the red, which would not make sense," Eletrobras President Luiz Pinguelli said, adding that the federal government may have to inject resources to refinance the Company. According to the executive, the price of power from the two nuclear reactors, Angra 1 and 2, does not reflect the real cost and must be raised. Around 25% of the power produced at Angra is consumed in Rio de Janeiro state, but the impact of raising its prices for consumers would be small. Power prices are prorated throughout the Brazilian grid, where nuclear power accounts for 2,000MW, or just 3% of Brazil's installed capacity, estimated at around 70,000MW. ========= C H I L E ========= SAESA: Chilean Investments Consolidated, Static for 2003 -------------------------------------------------------- Jorge Brahm, the CEO of Chilean power distributor Saesa, said that the utility will invest US$50 million to consolidate its investments in the Chile this year, relates Business News Americas. "We will not make any new investments in 2003, but we will maintain our operations at their current level," Brahm said. As for Saesa's 2002 results, "our operating results should be better than the year before, but our bottom line has been hit by debt refinancing in the last quarter," Brahm said. Saesa, after successfully launching a bond issue on the local market last week, was expected to pre-pay a US$150 million loan on January 21. The loan was originally due October 18, but was extended to November 8 and then to April 4. The Company will also pay a US$35 million long-term loan held with Banco Santander in the first week of February. CONTACT: SAESA Gerencia y Administracion Zonal de Osorno Bulnes 441, Osorno Telefono: (64) 206400 Fax: (64) 206209 - Casilla: 21 -0 =============== C O L O M B I A =============== ELECTROTOLIMA: Faces Dissolution if Rescue Plans Fail ----------------------------------------------------- Colombia's mines and energy ministry, the public services regulator and regional and municipal authorities only have two weeks to come up with a plan to bail out Tolima department utility Electrotolima. Colombian President Alvaro Uribe has threatened to dissolve Electrotolima in order to create a more efficient and reliable company, relates Business News Americas. "I assume the political responsibility of liquidating Electrotolima in exchange for creating a new company that will lower costs and adequately serve the people of Tolima," Uribe said during a visit to department capital Ibagu‚. "As it is today, the company is not viable," Uribe said. "For this reason the workers and department authorities have to make an effort that allows the company, or a new one, to be competitive in offering an adequate service to inhabitants," he continued. =================================== D O M I N I C A N R E P U B L I C =================================== COGENTRIX: Refuses To Enter Into Renegotiation Talks ---------------------------------------------------- Dominican Republic President Hipolito Mejia is urging Compania Electrica de San Pedro de Macoris, which operates the Cogentrix power plant, to enter into renegotiation talks in connection with its US$39-million debt. However, the Company refuses to cooperate, saying that it won't open talks unless the government pays the debt. The plant is currently shut down because the terms of the contract, signed during the Fernandez government and approved by Congress, make it less costly for the state than to have it operating. Meanwhile, former Dominican ambassador in Washington, Roberto Saladin, suggested to the Listin Diario that the Dominican government hire the best lawyers available to take Cogentrix to court, thereby avoiding a downgrade on the country's credit risk rating. In a DR1 Daily News report, Mr. Saladin explained that Cogentrix secured the approval of the PRD-majority Congress, which lent it the unconditional and irrevocable governmental guarantee for the payment of the loans. These loans were secured from European organizations such as Creditanstalt fur Wiederaufbau (KFW), ECGD and WestLB, which are now urging the government to meet the contractual obligation following Cogentrix's default on the debt. Ambassador Saladin explained that the credit insurance agencies and the creditors had recognized from the start that habitual solvency conditions were not being met in the Cogentrix deal and therefore agreed only to finance the plant if Congress would issue a government guarantee. UNION FENOSA: May Realign Interest to Market Rates On $200M Loan ---------------------------------------------------------------- Union Fenosa International, which has come under attack by the Dominican Republic government for inefficiency, could reduce its interest rates on a US$200 million loan to their Dominican subsidiaries. DR1 Daily News relates that Antonio Pantoja, the vice president of Union Fenosa International, announced that the company is willing to reduce its interest rates on the loan from the current 24% to 12% and then to 9%. The reduction in interest accrued would represent savings of US$42 million for the duration of the loan. Critics contend that the company lent itself the money at 24% at a time financing was available to the mother company from other sources at less than 5%. =========== M E X I C O =========== GRUPO MEXICO: Monday's Wage Dispute Talks Yield No Solution ----------------------------------------------------------- Grupo Mexico's last-ditch attempt to prevent a strike at its Cananea complex failed after workers rejected an agreement over 2000 wage revisions and other matters, reports Dow Jones. The Mexican copper mining concern met with the officials of the union on Monday to settle the conflict but the union ditched the Company's offer. The National Mining, Metallurgical & Similar Workers Union is demanding an increase in wages that was supposed to have been granted in 2000. Aside from that, the union is also demanding productivity bonuses and the reinstatement of 10 workers it said were unfairly dismissed by the company. "There has been no economic proposal on the part of the company up to now," a union spokesman told Reuters. "They have agreed to accept back five of the workers but not the remaining five." Grupo Mexico, one of the world's three largest copper producers, has been mired in cash problems amid poor copper prices and billion-dollar debts following a 1999 purchase of a rival. The Company reached an agreement in early December to reschedule the US$879-million in bank and bond debt held by Grupo Minero Mexico SA, the unit that handles the Company's Mexican mining operations. CONTACT: GRUPO MEXICO S.A. DE C.V. Avenida Baja California 200, Colonia Roma Sur 06760 M,xico, D.F., Mexico Phone: +52-55-5264-7775 Fax: +52-55-5264-7769 Home Page: http://www.gmexico.com Contacts: Germ n Larrea Mota-Velasco, Chairman and CEO Xavier Garca de Quevedo Topete, President and COO Alfredo Casar P,rez, COO, Ferrocarril Mexicano Daniel Ch vez Carre n, COO, Industrial Minera M,xico Daniel Tellechea Salido, VP and Administration and Finance President SANLUIS CORPORACION: Fourteen Banks Extend $234M Loan ----------------------------------------------------- Sanluis Corporacion SA, the Mexican supplier of suspension parts and brakes to General Motors Corp. and Ford Motor Co., will now be able to complete a debt restructuring that began in September 2001. According to Bloomberg, the Company, which has defaulted on foreign debt in the past two years, said it obtained a US$234- million loan from 14 banks, whose names were not disclosed. The loan is secured by Sanluis' suspension-parts unit. Earlier, the Company renegotiated terms of a Eurobond and commercial paper worth US$291 million and US$34 million in other debt at its brakes unit. SanLuis Corporacion trades on the Mexican Stock Exchange under the board code MSE: SANLUIS. Its Auto-Part Division, SANLUIS Rassini, manufactures suspension and brake components and systems, and it is a leading company in suspensions in North America and mercosur. Over 85% of SanLuis Corporacion's consolidated sales are made abroad and denominate in dollars. CONTACT: SANLUIS Corporacion, S.A. de C.V. Hector Amador Tel. +11-5255-5229-5838 Fax. +11-5255-5202-6604 Email: hamador@sanluiscorp.com.mex Web site: www.sanluiscorp.com UNEFON: Conflict With Nortel May Hamper Expansion Plans ------------------------------------------------------- Financial analysts warned that Unefon's current legal proceedings with Nortel Networks of Mexico could derail Unefon's expansion plans, reports Mexico City daily el Economista. The disagreement between the two firms began in late August when Unefon failed to pay US$6 million in interest on the supply of transmission equipment valued at US$350 million, leading Nortel to cancel the package valued at US$700 million. Nortel then proceeded to cancel its partnership with the Mexican firm, which prevented Televisi¢n Azteca from separating its capital from the telecommunications company. Just recently, the conflict escalated when Unefon asked Mexican prosecutors to open a criminal investigation of individual lawyers at Chicago-based law firm Baker & McKenzie, which is representing Nortel. Baker & McKenzie, which has a team of 150 attorneys in Mexico, slammed Unefon's petition, saying it was ungrounded, and that it considered it an "an abuse of the legal system." Unefon has a 5% share of Mexico's cellular phone market with more than 1.2 million subscribers. Mexican broadcaster TV Azteca SA owns 46.5% of Unefon, while the Saba family holds another 46.5% and 7% floats on the Mexican Stock Exchange. CONTACT: Unefon S.A. De CV Head Office EdificioA Puriferico Sur 4119 Fuentes del Pedregal Mexico DF Mexico 14141 Tel: +52 8582 50000 Fax: +52 8582 5052 Web site: http://www.unefon.com.mx/ Contacts: Engr Moises M. Saba, Chairman Pedro L. Padilla, Vice Chairman Nortel Networks Corp. Head Office Suite 100 8200 Dixie Road Brampton ONTARIO Canada L6T 5P6 Tel +1 905 863-0000 Fax +1 905 863-8423 Web http://www.nortelnetworks.com Contacts: Lynton R. Wilson, Chairman Frank A. Dunn, President & Chief Executive ================================= T R I N I D A D & T O B A G O ================================= BWIA: Consultant Blasts Accounting As Similar to Enron's -------------------------------------------------------- Financial consultant Ved Seereeram noted that some of BWIA's accounting methods seem to resemble the methods of now bankrupt company, Enron, to hide loans, the Barbados Nation relates. The consultant believes that minor investors were lured into investing in an Initial Public Offering that should not have been released in the market. Mr. Seereeram said that educated investors would have been more wary in taking up the IPO offered in December 2000. He added that there are inconsistencies and inexplicable entries in the accounts. In 1998, the Company posted US$9.037 billion in profits on total revenue of US$225.1 billion with total operating costs on US$214.2 billion. In the following year, profits dropped to US$3.68 billion despite an increase in the revenue at US$239.04 billion, with operating costs at US$237.05 billion. In 2000, net profits went further down to US$1.17 billion although total revenue went up to US$256.84 billion while operating costs increased slightly to US$256.27 billion. "What is consistent in these accounts are huge numbers jumping up all over the place. I would describe them as erupting accounts; there are huge amounts appearing and disappearing," he said. Among such discrepancies are the figures for Restructuring and Miscellaneous Income. The company's 2000 prospectus forecasted it to be US$38.997 million, but the actual income was only US$20.516 million. During the same year, the company predicted receivables and pre- payments to be US$36.367 million, but the value was recorded at US$55.739. In the Consolidated Income and Expenditure, the company had declared a profit of US$23.030 million in 1999. Mr. Seereeram noted that an entry called "others" was entered under this. Without the said entry, a loss of about US$13.872 would have been the final result. Mr. Seereeram said, "These are unusual entries. As an analyst I would have discounted this entry and said that the company made a loss." The article indicated that in the 2000 projected balance sheet deferred charges was US$15.059 million. However, the actual deferred charges figure in the 2000 balance sheet was US$0. He noted that the "unusual" items in the company's books were marginally offsetting losses. Seereeram noted other irregularities, such as a US$15.024 million recorded as "profit on sale of investment". Accounting papers reveal that the sale of the shares had a "put option". "The good thing about a put option," said Seereeram, "is that you don't have to record a loan on your accounts and you can actually record a profit." The report also indicated that BWIA's tangible net worth, based on the 1999 accounts was roughly US$2 million. This figure is quite far from the figure in the prospectus, which said that the company's net worth shall not be less than US$18 million on that year. If these were true, then according to Seereeram, the company has indications of insolvency. Seereeram believes that the company was already bankrupt before the September 11 attacks, which was largely blamed for the losses of carriers around the world. According to him, the real issue is the question of why the IPO was not underwritten. In his analysis, the reason for this was that commercial investors could see that the IPO was likely to fall. Robert Mayers, managing director of CMMB (Caribbean Money Market Brokers) Securities Ltd, echoed Mr. Seereeram's question of how the IPO got to the market. He said, "It is very irresponsible what transpired and it is very sad that something like this came to market." Mr. Mayers shares Mr. Seereeram's belief that educated investors did not take up the controversial BWIA IPO, seeing that it was bound to fail. He added, "No financial institution would agree to underwrite the issue as it was almost a certainty that it would fail." CONTACT: BRITISH WEST INDIES AIRWAYS Phone: + 868 627 2942 E-mail: mailto:mail@bwee.com Home Page: http://www.bwee.com/ Contacts: Conrad Aleong, President and CEO (Trinidad) Beatrix Carrington, VP Marketing and Sales (Barbados) Paul Schutz, CFO (Trinidad) ============= U R U G U A Y ============= GALICIA URUGUAY: Analyst Expects June Reopening ----------------------------------------------- Rafael Ber, a partner at local capital markets consultancy Argentine Research, believes Banco Galicia will be able to reopen its Uruguayan subsidiary Banco Galicia Uruguay by June this year, relates Business News Americas. The unit was suspended and intervened by the Uruguayan central bank in mid-February 2002 after losing US$500 million in deposits between December 2001 and January 2002. According to a Galicia spokesperson, the Argentine parent plans to reopen the subsidiary but the central bank has said it would demand a capital injection and a new business plan from Galicia before giving its stamp of approval. The main obstacle to reopening the bank in Uruguay was a government ordered deposit freeze, but Galicia's proposed deposit return plan has been approved by local authorities and the bank has the financial strength to meet the central bank's other demands, Ber noted. CONTACT: BANCO GALICIA URUGUAY S.A. World Trade Center Luis A. Herrera 1248 Piso 22 Montevideo Uruguay Tel.:(+598-2) 628-1230 www.bancogalicia.com.uy ================= V E N E Z U E L A ================= PDVSA: To Restart Largest Refinery Soon --------------------------------------- Paraguana, the largest refinery of Venezuela's state oil company Petroleos de Venezuela S.A. (PdVSA) may be restarted over the weekend, Platts said on its Web site. Paraguana refinery manager Ivan Hernandez was cited revealing that the refinery may start processing an average of 50,000 barrels of crude for producing gasoline, gasoil and kerosene. The national strike that had hit the country since last month has forced the company to shut down operations at the refinery. Oil production, which generates about 43 percent of the government's income, was greatly reduced. Venezuela, the fifth-largest oil producer in the world, is also the lone Latin American member of OPEC. PDVSA: Head Calls On Workers To Halt Strike ------------------------------------------- Ali Rodriguez, president of Venezuela's state oil company, Petroleos de Venezuela S.A., urged striking workers to return to work on Monday, the Associated Press reports. He added that the objectives set by the strikers are "unreachable". Mr. Rodriguez' plea was aired over state television station Venezolana de Television. "I urge you as citizens, appealing to whatever reserves of rationality there may be, to stop these activities, stop this campaign that affects the whole country," he said. The strike, which started in December 2 last year, seeks the resignation of president Hugo Chavez, or have him call early elections. Since then, the country's oil production, which generates approximately one-half of the government's revenue, had been reduced significantly. Venezuela is the fifth-largest oil exporter in the world, producing 3 million barrels per day before the strike. According to the government, oil production is now down to 800,000 barrels a day but opposition leaders say the figure is only 400,000. The country's president previously fired more than 1,000 workers out of the estimated 35,000 who joined the strike. Meanwhile, Mr. Chavez accused strike leaders of using unconstitutional means to seek his ouster. Because of this, that the government may walk out on negotiations, warned Mr. Chavez in his weekly television show. The Organization of American States sponsored negotiations between the government and the opposition, which began in November, but the conflict remains unresolved. Six countries -- Brazil, Chile, Mexico, Portugal, Spain and the U.S. -- have begun an initiative called "Friends of Venezuela" to help the talks. Meanwhile, Jimmy Carter a Former President of the United States and Nobel Peace Price Awardee is said to attend negotiations between on Monday. Mr. Carter arrived in the country last Wednesday, and was scheduled to meet with Mr. Chavez and Cesar Gaviria, secretary-general of the Organization of American States. Mr. Rodriguez was appointed by Mr. Chavez and is reportedly one of his major allies. CONTACT: Petroleos de Venezuela SA Head Office Apdo 169 Avenida Libertador La Campina Caracas Venezuela 1010-A Tel +58 212 708 4111 Fax +58 212 708 4661 Web http://www.pdvsa.com Contact: Ali Rodriguez Araque, Chairman Jorge Kamkoff, Joint Vice Chairman Jose Rafael Paz, Joint Vice Chairman SINCOR: Strike Drops Output To Ten Percent of Capacity ------------------------------------------------------ Production of light synthetic crude at Venezuelan heavy crude project Sincor sunk to just a fraction of the US$5-billion project's normal capacity (prior to the national strike). Sincor, which is operated by French oil company TotalFinaElf, is currently producing just 19,000 barrels/day, way below the project's 200,000b/d capacity, TotalFinaElf spokesperson Sarah Wachter told Business News Americas. The 19,000b/d production is being supplied to state oil company PDVSA, which is using the output in its own pipeline network, Ms. Wachter said. Sincor's operations were shut down in mid-December following the start of Venezuela's national strike on December 2. Sincor is one of four heavy crude upgrade projects in Venezuela. The others are Petrozuata, Cerro Negro and Hamaca. TotalFinaElf has a 47% stake in Sincor, PDVSA owns 38%, and Norway's Statoil 15%. *********** S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter Latin American is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Trenton, NJ, and Beard Group, Inc., Washington, DC. John D. Resnick, Edem Psamathe P. Alfeche and Oona G. Oyangoren, Editors. Copyright 2003. All rights reserved. ISSN 1529-2746. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR Latin America subscription rate is $575 per half-year, delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. * * * End of Transmission * * *