Venezuela seeks heavy oil tax reform in two weeks

[Robbien]

CARACAS: Venezuela's Congress is seeking to approve reforms within two weeks that would boost income tax on four multibillion dollar foreign-backed oil projects from 34 to 50 per cent, a legislator said.

. . .

This would hike taxes on four projects in the Orinoco Belt, which produce around 620,000 barrels per day (bpd) of extra heavy crude and upgrade it into synthetic oil that can be processed by traditional refineries.

A group of joint ventures that PDVSA signed earlier this year would not be affected because their agreements already establish the 50 per cent tax.

The Orinoco projects this year were hit with an "extraction tax" that effectively increased royalties to 33.3 per cent from 16.6 following a 2004 move to end a 1 per cent royalty holiday. PDVSA is currently seeking a majority stake in the four projects, which include investment from companies such as Exxon Mobil, Chevron and Total.

The Orinoco joint ventures were signed during the 1990s as part of a campaign to bring private investment to Venezuela's oil fields by offering low taxes and discounted royalties to attract investors at a time of low oil prices. But Chavez, a self-styled revolutionary and harsh critic of the United States, has promised to redraft oil deals signed by previous governments.

http://www.stuff.co.nz/stuff/0,2106,3769099a6026,00.html

[acmavm]

1. Do you mean Chavez thinks that the oil companies should

actually pay for the oil that they take out of the ground? Is he nuts?

:sarcasm:

[hadrons]

2. this is why American hegemony is so heavy-handed ....

can't let ideas like this inspire Americans here

[Nickster]

3. Uh oh. Chavez better have his guards around him 24/7. I sense another

coup attempt in the making.