A recent bill enacted by the Venezuelan government hikes the income tax rate from 34 percent to 50 percent for 6 foreign oil giants working in heavy oil ventures in the Orinoco basin.
Chevron Corp. is one of the companies affected by the increase which will be effective from January. Chevron did not comment on the Venezuelan announcements and its stocks closed down by 55 cents at $65.19.
Deputy oil minister Bernard Mommer said that the government is looking at a minimum 51 percent stake in those same ventures and a decsion on that will most likely be taken before December.
President Chavez has steadily taken a larger share of the profits from the Orinoco projects, which produce as much as 600,000 barrels a day of oil. Earlier in May, the government had increased royalties on the four projects from 16.6 percent to 33.3 percent.
This move may jeopardize investments as it basically eats into the companies' share of profits while making them shoulder a greater burden of costs.
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