Venezuela looks to change oil contract taxes

Dec 23, 2003 01:00 AM

Venezuela is hoping to convince foreign oil companies who won contracts in the 1990's to pay higher taxes according to the 2001 hydrocarbons law, Energy and Mines Minister Rafael Ramirez said.
"We are giving the option to migrate to the new legal code," said Ramirez, referring to contracts to operate marginal oil fields awarded in the 1990's. "We've had answers from two operating agreements to follow in the new code," added Ramirez.

Oil production at 33 Venezuelan fields that are operated by foreign companies is set to increase to 630,000 bpd by 2005, up from the current 481,000 bpd, according to a filing of state-owned oil company Petroleos de Venezuela to the Securities and Exchange Commission, or SEC, earlier this year.
The 55 companies that operate the fields under so-called operating service agreements have invested more than $ 7 bn since the fields were awarded in three bidding rounds in 1992, 1993 and 1997. However, the majority of the fields have had disappointing results in terms of production.

Total crude production in Venezuela is estimated to be at around 2.6 mm bpd, below the country's output quota as agreed upon by OPEC.
The current crude production quota is 2.8 mm bpd.

Source: Dow Jones
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