THE WALL STREET JOURNAL: Venezuela Tax Chief: New Tax For Oil Cos Began This Week: “The tax hike will affect a number of foreign companies including ChevronTexaco and Royal Dutch Shell, among others.” (ShellNews.net) Posted 23 April 05

DOW JONES NEWSWIRES

CARACAS -- A tax increase for oil projects in Venezuela announced over the weekend became effective Monday for all oil operating agreements, Venezuela's tax chief said late Thursday.

"The (Venezuelan tax agency) Seniat announced (the tax increase) on Monday 18 of April and from that day on all operating agreements now have to pay a 50%," tax rate, Jose Vielma Mora, head of Venezuela's tax agency Seniat, told Dow Jones Newswires.

Venezuela's President Hugo Chavez and the country's oil czar, Rafael Ramirez, announced over the weekend that the government would increase taxes on oil companies from the 34% preferential rate to a 50% rate.

The increase, government officials have said, will only apply to the 32 operating agreements in the oil-rich nation. The tax hike will affect a number of foreign companies including ChevronTexaco (CVX) and Royal Dutch Shell (RD,SC), among others.

Oil company representatives could not be immediately contacted late in the day.

Vielma Mora said the government is also conducting a tax review of five different foreign oil companies, some of which have failed to pay taxes. He declined to say which companies are part of that review.

Once the government determines if some companies are evading taxes, he added, the tax agency will give them various options to pay what they owe.

Analysts have warned that Venezuela could fail to meet future oil production targets if the government continues to impose new restrictions on oil companies operating within its borders.

Venezuela is the world's fifth largest oil exporting country and a member of the Organization of Petroleum Exporting Countries, OPEC.

-By Raul Gallegos, Dow Jones Newswires, 58-212-564-1339; raul.gallegos@dowjones.com

Click here for ShellNews.net HOME PAGE