Caracas Offers to Help U.S. with Oil Crunch Updated 10:52 PM ET September 17, 2000 WASHINGTON (Reuters) - Venezuela said on Sunday it had offered to adapt its refinery operations and maximize production of heating oil to boost supplies to the northeastern United States for the coming winter. Venezuelan ambassador to Washington Alfredo Toro-Hardy told Fox News Channel his country had also offered the United States the use of the Bahamas storage terminal of Petroleos de Venezuela SA (PDVSA), which has a capacity of 10 million barrels.

Further discussions involving senior Venezuelan government officials and the Department of Energy are scheduled on Thursday in Washington.

Toro-Hardy told Fox News the Venezuelan offer should prevent speculators from driving up oil futures prices and allow the northeastern United States to get needed heating oil at reasonable prices.

A DOE spokeswoman had no immediate comment on the discussions.

PDVSA President Hector Ciavaldini spoke with officials from DOE and the State Department and U.S. lawmakers about the proposal last week.

"We want to contribute in minimizing the possible negative impact that an eventual shortage of heating oil could have on the U.S. community this coming winter," he said in a statement released Saturday.

He proposed the use of PDVSA's terminal facilities in Freeport, Bahamas as storage for an "emergency reserve" to enable the safe and reliable supply of heating oil during winter, although the facility would need to be refurbished.

The Bahamas Oil Refining Company International Ltd., which was purchased by PDVSA in 1990, operates a terminal with a 20 million barrel crude and products storage capacity.

At present, the capacity actually in use is 10.2 million barrels, of which four million is devoted to crude oil storage, 4.7 million to fuel oil, and 1.5 million barrels to distillates and gasoline, PDVSA said in the statement.

Ciavaldini said Venezuela had accelerated operations to boost its crude production capacity, stepping up major investment in this area.

President Clinton said on Friday he did not think rising oil prices would hurt the U.S. economy over the short to medium term, but he was still considering options to fight higher energy costs.

One option under consideration is releasing oil from the Strategic Petroleum Reserve to counter high crude prices, which bounced off their brief downward dip to trade at their highest level in 10 years this week.

The administration is also setting up a two-million-barrel heating oil reserve in the northeast in a bid to avert high heating fuel prices there this winter.

http://news.excite.com/news/r/000917/22/news-energy-venezuela-dc

-- Martin Thompson (mthom1927@aol.com), September 18, 2000