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March 19, 2008 |
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PETROLEOS DE VENEZUELA: Gov't to Enforce New Tax on Oil Profits Petroleos de Venezuela SA's President and Venezuelan Energy and Petroleum Minister Rafael Ramirez said that the Venezuelan government will implement a new tax on oil profits, Venezuelanalysis.com reports. Minister Ramirez said during the World Heavy Oil Conference in Alberta, Canada that the tax will be applied to help pay for environmental damages and to compensate the Venezuelans through social programs, Venezuelanalysis.com notes. According to Venezuelanalysis.com, Minister Ramirez said that the tax is justified as oil prices and earnings have surpassed what was expected when contracts were signed. Minister Ramirez noted that international oil firms have also caused a lot of damage, Venezuelanalysis.com adds. The tax will help protect oil revenues once prices decrease when the northern winter season ends and demand declines, Minister Ramirez says, Venezuelanalysis.com reports. "Base price per barrel will be US$80, which is significantly greater than previous ranges of US$20 to US$30 per barrel, because worldwide refining capacity is reaching limits, and creating new supply is more expensive than ever before," Venezuelanalysis.com quoted Minister Ramirez. Growth in India and China has also increased worldwide demand for oil, the report says, citing Minister Ramirez. Prices are currently above US$109 per barrel, but the Organization of Petroleum Exporting Countries won't increase supply because the "the supply is in line with consumer demand," Minister Ramirez relates, according to Venezuelanalysis.com. Petroleos de Venezuela SA -- http://www.pdv.com/ -- is Venezuela's state oil company in charge of the development of the petroleum, petrochemical and coal industry, as well as planning, coordinating, supervising and controlling the operational activities of its divisions, both in Venezuela and abroad. The company has a commercial office in China. PDVSA is one of the top exporters of oil to the US with proven reserves of 77.2 billion barrels of oil -- the most outside the Middle East -- and about 150 trillion cu. ft. of natural gas. PDVSA's exploration and production take place in Venezuela, but the company also has refining and marketing operations in the Caribbean, Europe, and the US. * * * As of Feb. 14, 2008, Fitch Ratings held Petroleos de Venezuela SA's long-term issuer default rating and local currency long term issuer default rating at BB-. Fitch said the ratings outlook was negative. |
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