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Original Message -----
From: Per Kurowski
To: petroleumworldeditor@hotmail.com
Sent: Monday, June 12, 2006 11:27 AM
Subject: My reply to Oliver L. Campbell' reply to Philip's article,
which I have not read yet, since I do not find it.
My reply to Oliver L. Campbell’ reply to Philip's article,
which I have not read yet.
When
reading about the negation of tax avoidance in PDVSA it just reminded
me how, back in 1977, in the only business relation that I have
ever had with the oil industry we placed leasing contracts with
several of the subsidiaries, priced at 17% when they could get
11% interest rate, and all this based on the tax savings they
would obtain from THEIR OWN SHAREHOLDER. (Those were days of interest
rate controls and leasing was a way out even though 18% was considered
the maximum rate before risking going to jail)
Also
when we all know that Citgo paid taxes in the US as a result of
the only reverse procedure authorities have ever heard of with
respect to transfer prices, selling oil to Citgo at below market
prices so they could record profits and show the world how great
they were operating unprofitable refineries I assume that some
mumbo jumbo tax avoidances were also in play.
Although
I have been very critical about the “apertura” I also
believe that not for a second was PDVSA involved in conspiratorially
planning “its own privatization”, though I do not
think either they would be too upset if that had happened.
Yes
the “apertura” was a deal justified on the true basis
of the lack of cash that impeded urgent investment in production…
and so that everyone could get cash upfront for their own pet
projects, in other areas. The government got obviously the most
out of it but PDVSA got also its fair share, which they used to
invest, not in the production of oil, but in refurbishing gas
stations so they could sell popcorn there.
As
to the implementation of the “apertura” itself getting
cash upfront against lower taxes tomorrow, this was no real tax
avoidance but more of a tax income distribution scheme, taking
it from the next generation and spending it in the current.
Original
article: George
Philip : The politics of oil in Venezuela
Oliver
Campbell reply: Reply
to Mr George Philip
