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Venezuela sees annual $9 billion income in new oil law
Rooters ^ | Apr. 15, 2008

Posted on 04/15/2008 3:38:55 PM PDT by jsh3180

CARACAS, April 15 (Reuters) - Venezuela expects income of $9 billion a year through a new oil law obliging companies to give "windfall earnings" to the leftist government when world prices are above $70 a barrel, a minister said on Tuesday.

President Hugo Chavez, who has for years squeezed more revenue from oil companies operating in the OPEC nation and nationalized all foreign-run oil fields, wants the funds to be spent immediately on social programs in this election year.

The government will take in about 92 cents for every extra dollar when world prices are above $70 a barrel and then 97 cents when they are above $100 a barrel, his oil minister, Rafael Ramirez told reporters.

"Through the concept of this tax, there's going to be income around $9 billion. That's $770 million a month and an average of $150-$200 million a week. That's why, for the executive, it is urgent to create this law," Ramirez said after explaining the bill to Congress.

The bill is expected to become law within days.

World oil prices hit a record above $113 a barrel on Tuesday.

Chavez's new move against oil companies is part of a worldwide trend where oil-producing nations have sought to extract more revenue from foreign companies who are benefiting from high prices.

Still, oil sector analysts and industry officials have said they fear Venezuela's law is so tough it could inhibit investment in a country with some of the largest oil reserves outside the Middle East. (Reporting by Enrique Andres Pretel; Writing by Saul Hudson; Editing by Frank Jack Daniel and Marguerita Choy)


TOPICS: Foreign Affairs
KEYWORDS: chavez; chavismo; communism; energy; extortion; latinamerica; legalisedtheft; socialism; venezuela
A hefty new tax for Hugo and his cronies. He's on a rampage with his nationalization plans of late. I read somewhere yesterday he was going to nationalize Rusoro Mining, that would be one of the largest Russian Mining companies, run by the Agopov clan, big guys in the Russian mafia. I think Hugo may be screwing with someone that just might not take it.
1 posted on 04/15/2008 3:38:55 PM PDT by jsh3180
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To: jsh3180

At least until people stop buying the stuff from you, Hugie.


2 posted on 04/15/2008 3:45:30 PM PDT by arderkrag (Libertarian Nutcase (Political Compass Coordinates: 9.00, -2.62 - www.politicalcompass.org))
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To: jsh3180

I hear that the people there on pay $.12 a gallon for gas. He best get the money someplace or even his people will be up in arms.


3 posted on 04/15/2008 3:45:39 PM PDT by RC2
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To: RC2

But they can’t get a quart of milk!


4 posted on 04/15/2008 3:54:18 PM PDT by Red_Devil 232 (VietVet - USMC All Ready On The Right? All Ready On The Left? All Ready On The Firing Line!)
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To: jsh3180

As Zimbabwe goes, so goes Venezuela ...


5 posted on 04/15/2008 3:56:05 PM PDT by SkyDancer ("I Believe In Law Until It Interferes With Justice")
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To: jsh3180

Sounds like the ideas in Hillary and B.Husein O’s.playbook are being put to the test.


6 posted on 04/15/2008 3:57:12 PM PDT by Don Corleone (Leave the gun..take the cannoli)
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To: jsh3180

That $9 Billion dollars will cost Venezuela somewhere... my guess is higher productivity costs when less and less companies are willing to spend to improve infrastructures... so go ahead Hugo... show the world exactly why socialism and communism fails over and over again...


7 posted on 04/15/2008 3:58:42 PM PDT by John123 (Fluoride is NOT a neuro-toxin. It is a cavity fighter in spite of NO PEER Reviewed PROOF!)
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To: jsh3180

Incentives for the oil companies to seek under hundred dollar pricing per barrel, since $117 means they make an extra 51 cents. Then again, a hundred dollars a barrel, they make $2.10.


8 posted on 04/15/2008 4:07:20 PM PDT by kingu (Party for rent - conservative opinions not required.)
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To: jsh3180
Reporting by Enrique Andres Pretel; Writing by Saul Hudson; Editing by Frank Jack Daniel and Marguerita Choy)

It took four people to report, write and edit that amazingly short article?

While it is obviously irrelevant since the rationale is disingenious, still, how did Chavez and Co. come up with $70 as the breaking point? There is of course zero incentive now for Chavez and Co. to assist in any way to lower oil prices. By creating this windfall law they are making residents (and more so, cronies) dependent on the law's income which in turn creates a disincentive for oil companies to invest which lowers output which....brings us back to point 1.

Naomi Cambell, Sean Penn and the rest of the far left syncophants are just as to blame as their idol of socialism, Hugo Chavez.

9 posted on 04/15/2008 4:09:14 PM PDT by torchthemummy (W's Margin Of Victory In Florida 2000 - 537 / FL House Bill Number To Move Up Florida Primary - 537)
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To: jsh3180

If we had a CIA worthy of one hundredth the abuse the Left heaps on it, Chavez would have been dead for a decade.


10 posted on 04/15/2008 6:59:29 PM PDT by ccmay (Too much Law; not enough Order.)
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