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Exxon Mobil concerned about Venezuela oil tax hike
MarketWatch
HOUSTON
Petroleumworld.com 08 31 06Exxon Mobil Corp. (XOM) is worried by a tax hike on its heavy oil operations imposed by the Venezuelan National Assembly, the company said Wednesday.
ExxonMobil's Mobil Cerro Negro subsidiary "is concerned with the unilateral decisions taken by the Venezuelan government to change the fiscal terms of the Cerro Negro strategic association agreement, which the National Assembly approved," said company spokeswoman Susan Reeves.
The Irving, TX-based company holds a 41.7% stake in the 120,000 barrels-a-day Cerro Negro project, one of four heavy-oil Orinoco Belt joint-ventures between international oil companies and the state-owned giant Petroleos de Venezuela S.A. (PVZ.YY).
On Tuesday, Venezuelan legislators passed a new tax law raising upstream oil taxes to 50% from 34%. The move comes as the country's government seeks to gain a majority stake of the Orinoco oil projects by December. The new tax could bring in between $700 and $800 million to the government from the Orinoco projects, according to Venezuelan officials.
The four projects in the Orinoco area are jointly run by PdVSA along with ExxonMobil, Total SA (TOT), ConocoPhillips (COP), Chevron Corp. (CVX), Statoil ASA (STO) and BP PLC (BP).
ExxonMobil has seen its relations with the government of Venezuelan president Hugo Chavez sour in recent times as Chavez, a left-leaning former paratrooper, has sought to reassert the role of the state in the vital oil industry.
MarketWatch 30 08 06
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