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Archive for Monday, October 17, 2005

Venezuela’s Chavez says increase in oil production unlikely

October 17, 2005

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— Venezuelan President Hugo Chavez said Saturday that the world faces an energy crisis but there is little chance of his country and other OPEC members increasing production because they are already pumping near "their capacity."

"The world will have to get used to a barrel price, I think, of above $50, and energy will have to be saved," he told reporters as leaders from Spanish- and Portuguese-speaking countries met in this central Spanish town.

After soaring in August, crude oil prices have been between $60 and $70 a barrel for more than a month.

"We're at the doorway of a major energy crisis worldwide," Chavez said. "We'll have to develop other resources such as wind, solar and nuclear energy - naturally for peaceful purposes." He said Venezuela was in talks with Argentina and Brazil regarding nuclear power.

"Prices will continue to rise but oil is running out," he said.

Chavez said a "lack of imagination in the United States and the war in Iraq, which has destabilized the market in the Middle East, has also driven up prices." Increased demand from countries such as China and India is making the problem worse, he said.

"The whole world right now is producing petroleum at its maximum capacity," he said. "In Venezuela, for example, we can't produce a single barrel more."

Venezuela, a member of Organization of Petroleum Exporting Countries, is the world's fifth largest oil exporter and a major supplier to the U.S. market.

Venezuela's state oil company, Petroleos de Venezuela, says it pumps 3.2 million barrels of crude oil a day. But industry analysts put the figure lower, saying the country has never fully restored output since an extended strike in 2003 that sought to force Chavez's resignation.

Increased production would not solve the price problem, Chavez said.

"The cause of the increase in the price is not in the production. It's partly the intermediaries who make things dearer. It's also because of the increase in demand and the irrational capitalist consumerism model," he said.

"The United States for example, with scarcely five percent of the world's population, uses almost 25 percent of the petroleum and combustion fuels produced in the world," he said.

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