May 29, 2000

Venezuela calls Guyana's launch deal "unfriendly"

                  CARACAS, Venezuela (Reuters) -- Venezuela on Monday escalated a diplomatic
                  rift with Guyana, branding as "unfriendly" the granting of a concession for a
                  commercial rocket-launch site in an area subject to a long-standing territorial

                  The South American neighbors have been at odds for decades over the sparsely
                  populated Essequibo, a 61,500-square-mile (159,000-square-kilometer)
                  mineral-rich area the size of Florida. Venezuelan Foreign Minister Jose Vicente
                  Rangel expressed his "firm protest" over the space center deal signed earlier this
                  month with a Texas-based private company.

                  In a letter sent to his Guyanese counterpart Clement Rohee and published by the
                  ministry, Rangel "rejected this unfriendly act, which hampers a practical and
                  satisfactory solution to the territorial dispute between our two countries."

                  Dallas-based Beal Aerospace Technology Inc plans to initially invest at least $100
                  million in construction of the site and does not anticipate to launch a rocket from
                  Guyana for another three or four years. Rangel said he hoped Guyana would
                  "review its policy of concessions in the disputed area," which covers about 75
                  percent of the territory of Guyana, a former British colony.

                  He asked Rohee to agree to a meeting as soon as possible to discuss an issue
                  which the Venezuelan Foreign Ministry first mentioned last week when it
                  deplored the Beal deal.

                  Beal Aerospace Vice President David Spoede said last week that his company
                  was "very concerned and would have preferred to locate the facility in an
                  undisputed territory." He explained the Essequibo location was chosen because
                  of Guyana's sparse population and its proximity to the equator, allowing rockets
                  to send heavier payloads into space.

                  Paris-based Arianespace launches its Ariana rocket series from the European
                  Space Agency Center in Kourou, French Guiana -- a territory that borders
                  Guyana's eastern neighbor, Suriname.

                  Venezuela's claim on Essequibo, probably the last major territorial dispute in the
                  Americas, is rooted in 19th century colonial history but was revived last year by
                  President Hugo Chavez's left-wing, fiercely nationalist government.