By OGJ editors
HOUSTON, Apr. 17 -- Venezuela has increased taxes on crude oil and oil products moving out of the country.
On their exported oil volumes net of imports, companies must pay a per-barrel tax of 50% of the amount by which the monthly average price of Brent crude exceeds $70/bbl. The tax rate increases to 60% when the Brent price exceeds $100/bbl.
Payments of the new tax are deductible in calculations of income tax. Companies may deduct contributions to Venezuela's National Development Fund from their new-tax liabilities.
The move is the latest in a series of blows to producers in Venezuela and comes as the government moves to nationalize key industries, including cement and steel.
After welcoming international operators to Venezuelan exploration and production opportunities in the 1990s, the government reversed course after the election of President Hugo Chavez in 1998.
A hydrocarbons law enacted in 2001 raised royalties on production by private companies to 20-30% from 1-17%, guaranteed state-owned Petroleos de Venezuela SA majority interests in new projects, and required that foreign participation in oil and gas projects take the form of joint ventures with PDVSA.
Since then the government has renegotiated agreements in effect when the 2001 hydrocarbons law took effect into joint ventures with PDVSA as controlling partner.
It also has restructured the four "strategic associations" producing extra-heavy crude from the Orinoco belt and raised their royalties and income-tax rates. In response, ConocoPhillips and ExxonMobil Corp. quit their Venezuelan heavy-oil projects.
