Private oil companies face taxes in Venezuela

[Minstrel Boy]

Private oil companies face taxes in Venezuela

Apr. 14, 2005
Associated Press

CARACAS, Venezuela - Venezuela's oil minister said Thursday that private oil firms will have to sign new contracts to comply with legislation requiring that Venezuela's state-run oil company has a majority stake in all oil production projects.

...

Ramirez said companies operating under current contracts - both national and foreign - produce 500,000 barrels of oil a day in oil-rich Venezuela and they are not paying enough in income taxes.

His statements came a day after Chavez said the government may charge private oil companies taxes on operations that have declared losses in recent years amid an ongoing investigation by the country's tax agency.

...

Venezuela's tax agency, Seniat, began an investigation this month of private oil companies that have declared losses and have not paid income tax to Venezuela's government in recent years.



http://www.macon.com/mld/macon/business/11395495.htm

[Robbien]

1. Weird isn't it. Exxon & Co lose money in Venezuela taking

oil out of the ground but are able to declare billions of profit every quarter on that exact same oil sold here in the US.

Exxon and the rest of them built those wells in Venezuela back in the early sixties and seventies. Hard to believe they haven't recouped their costs by now especially when they only have to pay workers $300 a month.

[illflem]

2. A month or so ago Chavez said

there were no Venezuelans working in the foreign oil operations, they are all foreigners.

[cliss]

3. I read that too.

I also read that Chavez is levying a surtax of 17% to the refineries. That didn't seem like gouging to me. A spokesman said that they oil company was "paying, but under protest". I chuckled.

In the meantime, they're selling the stuff in the US at a 1,000% profit. Excuse my tears, Exxon.

[cire4]

4. This is why the US hates Chavez so much...

...because he hinders the ability of American corporations to profit off the country.

[Moderator]

5. kick to combine

[chlamor]

6. Venezuela to Change Agreements with Transnational Oil Companies

Venezuela to Change Agreements with Transnational Oil Companies

Friday, Apr 15, 2005

By: Gregory Wilpert – Venezuelanalysis.com

Caracas, Venezuela, April 15, 2005—According to Venezuela’s minister of Energy and Petroleum, Rafael Ramirez, the operating agreements that exist between the state oil company PDVSA and various transnational oil companies caused $260 million of losses for PDVSA and will thus be revised. During a press conference yesterday, Ramirez said that the goal would be to change the operating agreements into joint ventures with PDVSA, where PDVSA would have a majority stake.

Ramirez, who also serves as president PDVSA, explained that there are 32 operating agreements with companies such as ChevronTexaco, Royal Dutch Shell, France’s Total, and Spain’s Repsol, which produce about 500,000 barrels of oil per day, mostly from marginal oil fields. The contracts were signed in the between 1992 and 1997, when the price of oil was very low and the government at the time was interested in opening up the country’s oil industry to foreign investors.

<snip>

The Energy Ministry’s new requirement is to have all operating agreements changed into joint ventures in the next six months, under which they would pay 30% royalties, as well as taxes of 50%. A royalty is the percentage of the extracted oil’s market value that an oil company must pay directly to the government, before it subtracts any of its expenses. The taxes are then applied to the profits that the oil company makes on the sale of the remaining oil (i.e., after subtracting its expenses).

According to the new law on hydrocarbons, which went into effect in late 2001, international investment project in the oil sector would take the form of joint ventures, with PDVSA maintaining a 51% stake in these ventures. The new law also raised royalties from 16.6% to 30% and lowered taxes from 67% to 50%.

http://www.venezuelanalysis.com/news.php?newsno=1588

[w4rma]

7. I can't find anything to disagree with there. Looks good. (nt)

[nadinbrzezinski]

8. When are we invading?

:sarcasm:

[TomClash]

9. Chavez had better beef up security! nt