Peter Howard Wertheim
RIO DE JANEIRO, Jan. 25 -- Venezuela has increased pressure on international oil companies (IOCs) after moving private production contracts to government control and making claims for back taxes through tax authority Seniat (OGJ Online, Jan. 9, 2006).
The latest blow is a resolution passed Jan. 9 that limits deductible expenses on natural gas production to 15% of the wellhead price. This contradicts terms of previous license agreements and leaves various IOCsnotably Statoil ASA and Chevron Corp.facing new costs. A government spokesman, Petroleos de Venezuela SA, said the change would encourage firms to reduce spending.
The extra expense from this resolution will be relatively minor. However, it is another signal to foreign operators that the government of Hugo Chavez is determined to squeeze them financially.
Late last year Energy Minister Rafael Ramirez outlined an income tax increase to 50% from 34% on four heavy-oil projects in Venezuela's Orinoco River basin, potentially affecting operations of ExxonMobil Corp., Chevron, ConocoPhillips, BP PLC, Total SA, and Statoil.