*TOP NEWS* Latin America

Reuters: [2008-05-14 23:45:00]

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Keywords: *TOP NEWS* Latin America 
    

Brazil fears U.S. objection on offshore oil-report

Reuters: [2008-05-14 23:37:00]

RIO DE JANEIRO, May 14 (Reuters) - The head of Brazil's oil market regulator said on Wednesday he was worried the United States might contest the country's rights over huge offshore oil reserves lying in a so-called exclusive economic zone.

Agencia Estado news agency quoted Haroldo Lima as saying during a Congressional hearing he would take part in a defense Ministry meeting on the subject soon. Lima heads the National Petroleum Agency (ANP).

The 1994 United Nations Convention on the Law of the Sea, which was signed but not ratified by the United States, says that coastal states have exclusive economic zones extending 200 nautical miles (230 miles or 370 km) from the baseline, where they enjoy exclusive rights over all natural resources.

"We say the limit is 200 miles. Some countries agree and other don't. I recall that one of the angry ones is the United States; they don't respect this thing about 200 miles too much," Lima said, according to the news agency.

"If the Americans pick on this one, we've got a problem," it quoted him as saying.

State oil company Petrobras <PETR4.SA> <PBR.N> along with foreign partners including BG Group <BG.L> have found big reserves of oil and gas in a deep subsalt cluster about 290 km (180 miles) from the coast.

Last November, it estimated recoverable reserves at the Tupi field at between 5 billion and 8 billion barrels of oil equivalent in light oil and natural gas.

The U.S. Embassy in Brasilia denied that Washington had any problems with the exclusive economic zone.

"We do respect the 200-mile limit," an embassy spokesman said.

It was not clear what prompted Lima's concern.

Lima, known for his leftist views, last month created market turmoil when he came up with an estimate for reserves at the Carioca field, next to Tupi, putting it at 33 billion barrels and citing Petrobras data.

The ANP later distanced itself from his remarks, saying the data was in fact an analyst's estimate which had been in the public domain for weeks.

(Reporting by Andrei Khalip; Editing by Eric Walsh) ((andrei.khalip@thomsonreuters.com; +55 21 2223 7144; Reuters Messaging: andrei.khalip.reuters.com@reuters.net)) Keywords: BRAZIL USA/OIL

UPDATE 1-Germany's Merkel says can handle Chavez at summit

Reuters: [2008-05-14 22:51:00]

(Adds Chavez 'stone throwing' comment, paragraph 6)

BRASILIA, May 14 (Reuters) - German Chancellor Angela Merkel played down a dispute with Venezuelan President Hugo Chavez on Wednesday, saying she could handle him on her own and would greet him at a summit in Lima this week.

Tensions between the two countries have risen since the leftist Chavez called Merkel a political descendant of Adolf Hitler for implying he had harmed relations between Europe and Latin America.

Merkel, who will attend a summit of European and Latin American leaders this week in Lima, said she would be friendly toward to all participants, who are expected to include Chavez.

"I will certainly greet everybody courteously," Merkel said during a news conference with Brazilian President Luiz Inacio Lula da Silva.

"President Lula can relax; I can look after myself," Merkel said when asked whether Lula could help smooth over the dispute.

Chavez was less conciliatory on Wednesday, saying Merkel came to Latin America "throwing stones."

The Venezuelan Foreign Ministry on Tuesday accused Germany of meddling and said Venezuela was not a disturbing factor in Latin America, Europe or the world.

"If I know Chavez and Merkel well, they will sit down, have a cup of coffee and peace will reign between Caracas and Bonn," Lula said, mistakenly referring to Germany's previous capital.

Chavez, a critic of capitalism and globalization, has insulted leaders from several countries, including Colombia, Mexico and frequently the United States.

Lula, who shares some of Chavez's ideals of regional integration to counter-balance U.S. and European interests, is usually less vocal in his criticism.

Merkel is on a two-day visit to Brazil before she attends the summit in Lima.

(Reporting by Raymond Colitt; Editing by Eric Walsh) ((ray.colitt@thomsonreuters.com; +5561 3426-7021)) Keywords: GERMANY CHAVEZ/BRAZIL

Brazil names former activist as environment chief

Reuters: [2008-05-14 22:45:00]

BRASILIA, May 14 (Reuters) - Carlos Minc, a co-founder of the Green Party in Brazil, was named as the country's new environment minister on Wednesday, a day after the resignation of high-profile Amazon defender Marina Silva.

Minc, currently Rio de Janeiro state's environment secretary, takes over the task of balancing demands for the protection of the Amazon rain forest against growing pressure for it to be used for agricultural and energy production.

A spokesman for President Luiz Inacio Lula da Silva said Minc had accepted the post.

Silva, a former rubber tapper and union activist who was seen as a staunch defender of the Amazon, quit on Tuesday after becoming increasingly isolated within the government.

Analysts said her departure was due to losing a series of battles to stop infrastructure projects in the Amazon and over control of government development policy in the world's largest rain forest.

(Reporting by Stuart Grudgings; Editing by Cynthia Osterman)

((stuart.grudgings@thomsonreuters.com; +55 21 2223-7144; Reuters Messaging: stuart.grudgings.reuters.com@reuters.net)) Keywords: BRAZIL ENVIRONMENT/MINC

Emerging debt-Argentina down, Venezuela up on Chavez talk

Reuters: [2008-05-14 22:42:00]

* Argentine bonds down awaiting farmers' negotiation offer

* Venezuela up as Chavez "anxious" for better US ties

* Chile affirmed by Fitch "A" with positive outlook

By Manuela Badawy

NEW YORK, May 14 (Reuters) - Argentine sovereign bonds fell on Wednesday as investors awaited news from a farmers strike that has crippled the economy and has raised supply fears of global markets.

Argentine Discount bonds due to mature in 2033 <ARGGLB33=RR> fell 1.312 percentage points to bid 79.938 as investors waited to see if the Argentine government offered to negotiate with the farm leaders.

On Tuesday a farm leader offered to lift the protest for 24 hours if the government agreed, but said the strike, on its sixth day, could be extended if there is no agreement.

Farmers in Argentina, a leading exporter of soy, wheat and corn, are locked in a two-month standoff with the government over a new sliding-scale export tax that farmers say effectively caps prices for their goods. Argentina accounts for nearly 3.0 percent of world food exports.

Meanwhile, Venezuelan bonds bounced on reports that its president Hugo Chavez said was "anxious" to improve relations with the next U.S. president.

Venezuela's sovereign bond due in 2034 <VENGLB34=RR> rose 1.500 percentage points on the news, to bid 84.500 and to yield 11.224 percent.

"This mildly counters the negatives of the last few days where there's been increased references of the link Chavez/FARC, which puts pressure on the US to dub Venezuela a state supporter of terrorism," said Enrique Alvarez, head of emerging market strategy at IDEAglobal.

Chavez, who has called U.S. President George W. Bush "the devil" and "Mr Danger", accuses the United States of having imperial designs in Latin America and says the White House plotted his overthrow.

Chile, on the other hand, had its credit rating affirmed by Fitch with a positive outlook, despite mounting inflation pressures and some economic deceleration, signaling that it may upgrade the country's ratings if those problems are addressed.

Fitch currently rates Chile's sovereign bonds at "A".

The agency said a rating upgrade is still possible depending on the "effectiveness of the monetary and fiscal policy response" to those macroeconomic challenges.

It also stressed that fiscal and external indicators have strengthened since its last review.

Chile's inflation reached 7.8 percent last year, well above the central bank's target of 3 percent.

"Chile still stands out in the region as a very well managed economy and despite the recent policy challenges and unfortunate negative shocks its policies are still seen as the reference or standard it terms of conventional, forward-looking, and orthodox policy making," Alberto Ramos, senior economist at Goldman Sachs said in a research note.

((manuela.badawy@reuters.com; +1 646-223-6055; Reuters Messaging: manuela.badawy.reuters.com@reuters.net))

Keywords: MARKETS EMERGINGDEBT/