Venezuelan President
Plans New Oil Taxes
Venezuela's President
Hugo Chavez has urged
ministers to come up
with suggestions for
possible new taxes on
the windfall profits
earned by international
oil companies, local
press reported Sunday.
"I want you all to show
me a recommendation for
what we could do to
impose a tax on
windfalls, fruit of the
sudden increase of oil
prices that has nothing
to do with oil
production costs,"
Chavez said, adding that
the idea came up from an
opinion about windfall
profits in the oil
sector of Joseph
Stiglitz, winner of the
Nobel Prize for
Economics in 2001.
The tax will represent
the fourth rise in oil
taxes in as many years
as part of Chavez's
drive to increase
revenue from the oil
industry and tighten
state control over oil
fields.
Over the past two years,
the Venezuelan
government has raised
taxes for oil
exploration, extraction,
processing and selling
to foreign companies.
According to Chavez, the
new foreign company
joint venture model,
under which the
Venezuelan government
possesses 51 percent of
shares, has given the
government a payoff of
more than 40 billion
U.S. dollars in cash and
100 billion in assets.
Implemented by state oil
company Petroleos de
Venezuela (PDVSA),the
model was accepted by
about 20 foreign oil
companies, but was
rejected by U.S. company
Exxon Mobil.
Chavez threatened to sue
Exxon Mobil for unpaid
oil taxes, days after
Exxon won court orders
freezing up to 12
billion U.S. dollars in
Venezuelan assets in
pursuit of compensation
for its losses incurred
as a result of Chavez's
nationalization drive.
The president has also
barred Exxon from
buying, selling or
trading oil in
Venezuela.
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