Energy News  





. Analysis: Oil tax upped in Venezuela

disclaimer: image is for illustration purposes only
by Carmen Gentile
Miami (UPI) Mar 26, 2008
Venezuela is set to impose a new tax on oil profits on petroleum earnings caused by soaring global oil prices, a move seen by some as an effort to replenish diminished state coffers.

In light of recent oil prices exceeding $100 a barrel, President Hugo Chavez said Venezuela would readjust its tax scale, saying soaring profits were not "a product of any extraordinary effort."

"They're earning money that they haven't accounted for," Chavez said earlier this week when discussing the intended tax increase.

The increase will reportedly go for both foreign oil and state-owned PDVSA, profits from which go to finance the Chavez administration's vast social spending programs. According to local media, PDVSA profits totaling more than $40 billion went toward financing social programs in Venezuela last year.

Chavez's commitment to funding wide-ranging health and educational programs in Venezuela has forced him to implement the latest tax increase, a proposal that has been in discussions for the last two months or so, said Daniel Linsker, an Americas expert at the London-based Control Risks consulting firm.

"Chavez needs to maintain this high level of spending so he needs more money," Linsker told United Press International, adding the new tax would likely be implemented some time ahead of November elections to curry greater favor with the poor who comprise the president's support base.

But the increased tax burden could dissuade foreign oil firms from investing in Venezuela, where companies are already required to accept a minority stake in all projects, he surmised.

It could also further hamstring PDVSA, which according to Linsker and even some Venezuelan officials has suffered considerably from insufficient infrastructure investment, resulting in decreased production in recent years. Leading Venezuelan energy officials estimate the country is producing 3.2 million barrels per day. OPEC estimates place output at somewhere near 2.5 million bpd, however, he noted.

Last year Luis Vierma, exploration and production vice president at PDVSA, said Venezuelan oil faces a "significant operational emergency" if it does not increase the number of rigs operating in the country and that the state firm fell short of its 2007 goal of getting 191 rigs online in 2007 and producing some 3.3 million bpd.

In another troubling sign for the sector, the Venezuelan National Bank announced in January that Venezuela's oil industry shrank by more than 5 percent in 2007. Production was off 5.3 percent in 2007 from the previous year and contributed $3.14 billion to the country's gross domestic product, down from both 2006 and 2005 when the sector accounted for a reported $3.38 billion, the bank reported.

Just days after the bank's report, PDVSA officials announced that the period for which foreign companies can pay for oil was reduced from 30 days to eight.

Venezuelan officials said they decided to reduce the length of its payment period so PDVSA can, in turn, reinvest in its infrastructure sooner.

Community
Email This Article
Comment On This Article

Related Links
Powering The World in the 21st Century at Energy-Daily.com




Tempur-Pedic Mattress Comparison

Newsletters :: SpaceDaily Express :: SpaceWar Express :: TerraDaily Express :: Energy Daily
XML Feeds :: Space News :: Earth News :: War News :: Solar Energy News
New Natural Gas Pipeline From Wyoming To The US Canadian Border
Calgary, Canada (SPX) Mar 26, 2008
The Alliance Pipeline and Questar Overthrust Pipeline Company (Questar) have announced that they have entered into a Memorandum of Understanding (MOU) to develop the Rockies Alliance Pipeline (RAP), a jointly owned interstate natural gas pipeline from Wamsutter, Wyo., to the Minnesota U.S./Canadian border (Emerson trading hub).

.
Get Our Free Newsletters Via Email
  



  • Sanford, Florida Chooses MaxWest Environmental Systems To Turn Sludge Into Renewable Energy
  • Analysis: Oil tax upped in Venezuela
  • Dramatic Increase In Thermoelectric Efficiency Achieved
  • Parker Awarded Ohio Grant To Advance Wind Energy Technology

  • Unite Calls For International Standard Design For New Nuclear Power Stations
  • NRG Forms Company To Develop Advanced Boiling Water Reactor Nuclear Power Projects
  • Toshiba expands in US with NRG nuclear tie-up
  • Mubarak aims for Russian nuclear technology, arms: media

  • Scientists Identify Origin Of Hiss In Upper Atmosphere
  • NASA Co-Sponsors Ocean Voyage To Probe Climate-Relevant Gases
  • Satellite Data To Deliver State-Of-The-Art Air Quality Information
  • New Model Revises Estimates Of Terrestrial Carbon Dioxide Uptake

  • Macedonia plants two million trees to revive its forests
  • Deforestation Worsening In Brazil Claims Greenpeace
  • Secrets Of Cooperation Between Trees And Fungi Revealed
  • Researcher: Wild California just a memory

  • Are Organic Crops As Productive As Conventional
  • Corn's Roots Dig Deeper Into South America
  • Prized fish the latest liquid asset for Asia's super-rich
  • Mediterranean tuna at risk from 'bloated' fishing fleet: WWF

  • ECOtality's eTec To Conduct Testing Of Chevrolet Tahoe Hybrid Electric Vehicles
  • Argonne And DoT Open Transportation Research And Computing Center
  • Clean-Vehicle Research Initiative Making Progress
  • New Lung Association Study Shows 142 Billion Dollar Benefit Of Converting To Zero-Emission Vehicles By 2030

  • Europe's EADS finds sweet home in Alabama despite uproar
  • A380 superjumbo makes European debut in London
  • Aviation industry must act fast on climate change: Airbus chief
  • Northrop, EADS to invest 600 mln dlrs in Alabama site

  • Nuclear Power In Space - Part 2
  • Outside View: Nuclear future in space
  • Nuclear Power In Space

  • The content herein, unless otherwise known to be public domain, are Copyright 1995-2007 - SpaceDaily.AFP and UPI Wire Stories are copyright Agence France-Presse and United Press International. ESA Portal Reports are copyright European Space Agency. All NASA sourced material is public domain. Additional copyrights may apply in whole or part to other bona fide parties. Advertising does not imply endorsement,agreement or approval of any opinions, statements or information provided by SpaceDaily on any Web page published or hosted by SpaceDaily. Privacy Statement