PDVSA Refuses to Comment on Lawsuit

PDVSA has refused to comment on a lawsuit it is facing from Lyondell Chemical Co. for allegedly breaking a crude oil supply contract. "Because it is a legal matter and it is in the courts, our lawyers have advised us not to make comments about it," stated a PDVSA official.

Lyondell, which has a joint refining venture with PDVSA, is seeking $90 million in compensation for a 30 million-barrel shortfall in crude oil supply between April 1998 and September 2000 when Venezuela cut sales to comply with OPEC quotas. The U.S. company is also seeking to avert another reduction from PDVSA for March of up to 20.5 percent in its 230,000 barrel per day (bpd) contract for Venezuelan heavy crude oil. Venezuela agreed in late December to cut approximately 170,000 bpd from production beginning January1st to meet its latest quota commitment to the OPEC. The world's No.4 oil exporter sells most of its crude through term contracts into the U.S. Gulf Coast, which contains complex refineries capable of processing its typically heavy, high sulfur oil.