Posted on 03/14/2006 2:27:09 PM PST by antaresequity
14/03/2006 23:16 >>
DJ Venezuela To Charge Oil Majors 50% Tax On Orinoco Crude
CARACAS (Dow Jones)--
Venezuela will hike the tax rate on international oil firms operating in the Orinoco river basin to 50% after pushing a legal reform through the National Assembly, Oil Minister Rafael Ramirez said Tuesday. "There is no doubt that the oil companies in the Orinoco oil belt have to pay 50% income tax," said Ramirez on the sidelines of meeting between President Hugo Chavez and his Uruguayan counterpart, Tabare Vazquez. "A reform to the existing law is justified," he added. Chavez''s ruling coalition controls all 167 seats in the National Assembly, guaranteeing swift approval of any legislation presented by his economic cabinet.
Ramirez first announced plans to hike the income tax on Orinoco projects in mid-2005, but the Oil Ministry still hasn''t drafted the legal reforms that must go through Congress toimplement the tax increase. In 2004 Venezuela hiked the royalty on Orinoco production to 16.67% from 1%, arguing that the 1% tax holiday was granted during a period of low world oil prices.
Oil majors Exxon Mobil Corp. (XOM), Chevron Corp. (CVX), BP PLC (BP), ConocoPhillips (COP), Total (TOT) and Statoil (STO) have stakes in Orinoco ventures. The projects, four in total, collectively pump around 600,000 barrels a day of tar oil, which is converted into synthetic crude at special upgrading facilities, accounting for around a fifth of Venezuela''s total oil production. The projects were designed under low oil price scenarios in the 1990s, and the price boom in recent years prompted the Chavez administration to hike royalties in 2004.
PdVSA has teamed up with foreign companies from Iran, Spain, Russia and other countries to calculate oil reserves in the Orinoco, the first step toward launching new projects. Venezuela says it currently holds over 200 billion barrels of reserves in the area. Concerning a possible income tax increase on natural gas production, Ramirez said the ministry has not taken a decision yet.
Natural gas producers currently pay a 34% income tax rate, but tax officials have said this could be lifted to 50%. "We have to see," said Ramirez. "It''s a public service." Companies such as Chevron and Statoil have begun massive offshore natural gas development projects in Venezuela under the assumption they would be paying a 34% tax rate.
-Peter Millard, Dow Jones Newswires; 58-212-564-1339; peter.millard@dowjones.com (END) Dow Jones Newswires 14-03-06 2216GMT Copyright (c) 2006 Dow Jones & Company, Inc.
"...not threatening your own."
Sir, you are either pathetically uninformed or you are being deliberately inflamatory. I think you have already been pointed to some sources you might find helpful if it is merely a matter of being uninformed.
Yep. Looks like Chavez was shrewd enough to know exactly which skunks to deal with, too.
I like how you move right along to practical matters. (Morally, there is nothing that needs to be discussed.)
No, he was just lucky that Georgia peanut came down south to him to validate those fraudualant election results.
The CIA should have plugged Hugo Chavez years ago.
Exactly. Let Hugo sell it to someone else. (And maybe short some stock if you are holding it).
Absolutley. The prissy Church committee and their ilk got us ought of that business, as you know. Now it only takes a couple of hundred thousand dead people and a couple trillion bucks to dislodge one of these slimeballs.
Exactly! We think alike. How I long for the can-do CIA of the past. Hugo would have been dead or overthrown years ago. Now Hugo is in tight with China same as Iran is. Stories say that this military (great to suppress internal rebellion) is being trained by China and Russia
You think wrong.
"You think wrong."
No I didn't.
Comparing a Jew to Hitler?
That's beneath even you.
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