Archive for Wednesday, January 29, 2003

Venezuela oil production hits 1 million barrel mark

January 29, 2003

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— President Hugo Chavez's government scored a victory in Venezuela's political crisis by producing more than 1 million barrels of oil Tuesday, frustrating a 2-month-old opposition drive to strangle the world's No. 5 oil exporter.

By raising production to a third of its normal rate, Chavez seized another advantage over his opponents -- jump-starting Venezuela's oil industry while defeating calls for a February referendum on his rule.

But the 58-day-old strike has put Venezuela on the verge of economic collapse, caused long-term damage to oil infrastructure and forced Chavez to extend his ban Tuesday on U.S. dollar purchases to preserve foreign reserves.

Chavez surpassed the 1 million-barrel benchmark by focusing on newer oil fields where crude is easier to extract.

Dissident executives at the state oil monopoly, Petroleos de Venezuela S.A., confirmed production surpassed 1 million barrels, compared to a low of 200,000 during the strike. Oil provides half of Venezuela's government revenue.

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