Venezuela Oil Min: Global Oil Capacity At Its Limit

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Venezuela Oil Min: Global Oil Capacity At Its Limit
13:41 EDT Tuesday, August 16, 2005CARACAS -(Dow Jones)-

The world's oil producing countries have nospare oil production capacity left and some oil producers have evenseen output decline, Venezuelan Oil Minister Rafael Ramirez saidduring a television interview Tuesday."There is a production capacity that is at its limit in alloil-producing countries," said Ramirez."There is an important decline in non-OPEC countries, in the NorthSea there is a decline of at least 200,000 barrels a day," addedRamirez.Ramirez said a two-month oil strike in Venezuela that shut in outputat the world's fifth largest exporter for two months created theconditions for the current price rally. He added that the war inIraq is also responsible for the record prices this year."The impact that the sabotage to our oil industry had on the oilmarket was probably a chain reaction that the (oil market) has notrecovered from," said RamirezThe oil strike, organized by opponents of left-wing President HugoChavez in December 2002, cost the country $13 billion in damages andlost oil sales, according to the government.Ramirez said the tightening oil market will make it easier forVenezuela to find new clients for its oil if the country decides tohalt oil sales to the U.S. Over the weekend Chavez renewed a threatto halt U.S. oil sales if relations with Washington continuedeteriorating."We are willing, within the concept of security and defense of thenation, to maintain our industry with or without the U.S.," saidRamirez.Analysts, however, say Venezuela will have difficulties selling itsheavy grade of oil to refiners outside of the U.S., who do not havespecial plants to remove sulfur from Venezuelan crude.Chavez is a fierce critic of U.S. foreign policy and accusesPresident George W. Bush of backing a 2002 coup against him.Washington denies the charges, but U.S. officials describe Chavez asauthoritarian and a threat to stability in the region.Last week the U.S. denied visas to three Venezuelan militaryofficers amid accusations from Chavez that the U.S. Drug EnforcementAgency was involved in spying operations here.-By Peter Millard, Dow Jones Newswires;58212-5641339;peter.millard@...;(END) Dow Jones Newswires