The Hydrocarbons Law raises royalty rates from 16.7 percent to 30 percent. Giusti warned the new rates will drive investors to other oil producing countries, where rates do not exceed 20 percent and the average rate is 7.1 percent. Among Venezuela's fellow OPEC members, the average is 14.7 percent.
Critics were unappeased by a compromise allowing payments as low as 20 percent for the most high-risk projects, such as heavy crude oil fields in the environmentally fragile Orinoco River Delta.
Allowing for rates of 20 percent ``can only be considered a gesture. This doesn't change the law's central objective, which is to impose absolute state control over the oil industry,'' said economist Orlando Ochoa in an editorial published last week in Caracas daily El Universal.
The Hydrocarbons Law is among the most contentious of 49 laws that Chavez passed last month under special powers that allowed him to bypass Congress. Several business leaders and opposition legislators have threatened to ask the Supreme Court to strike down all 49 laws, arguing that Chavez passed them without consulting the private sector.
Business leader have also called a Dec. 10 strike to protest the laws. [End Excerpt]