Venezuela state oil firms to pay 'back taxes'

Venezuela's tax authority Seniat has received or been promised payments from two state-dominated joint venture firms after imposing large back-tax bills on recently nationalized heavy oil development projects.

Sept. 6, 2007

2 min read

Eric Watkins
Senior Correspondent

LOS ANGELES, Sept. 6 -- Venezuela's tax authority Seniat has received or been promised payments from two state-dominated joint venture firms after imposing large back-tax bills on recently nationalized heavy oil development projects in the country's Orinoco belt.

In a statement, Seniat said Ameriven paid some $400 million in back taxes from September 2001-December 2004, while Petrozuata agreed to pay $172 million for 1996-2006. The statement also said Cerro Negro was billed for $46 million in back taxes from 2001-04.

Petrozuata, now known as Petro Anzoategui, is 100% owned by state-run Petroleos de Venezuela (PDVSA), which also owns 70% of Ameriven, renamed Petro Piar in July. PDVSA controls 83.4% of Cerro Negro, now known as Petro Monagas.

The announcement, which comes after the state's recent takeover of majority control of Venezuela's energy projects, likely will be interpreted as a setback for ConocoPhillips and ExxonMobil Corp., which have been seeking compensation for the loss of their operations in the country.

When PDVSA started its takeovers, several international oil companies—among them BP PLC, Chevron Corp., Statoil ASA, and Total SA—came to terms over their continued minority involvement in the projects.

ConocoPhillips and ExxonMobil, however, failed to agree to handover terms that would have granted PDVSA at least a 60% stake in their projects. Failing any agreement, PDVSA appropriated ConocoPhillips's 30% share and ExxonMobil's 42%.

Contact Eric Watkins at [email protected].