Minister Asks Orinoco Oil Projects to Pay 30% Royalty


Map of Venezuela - Orinoco Belt
(Click to Enlarge)
Venezuela's energy and oil minister and state oil firm PDVSA's president Rafael Ramirez has asked foreign companies that operate four extra-heavy crude upgrading projects in the Orinoco oil belt to "voluntarily" pay a 30% royalty rate, above the present 16.7%, Caracas daily El Universal reported.

The national assembly, the seat of Venezuela's legislative power, is reportedly preparing a new bill to enforce that royalty increase by law. If implemented, either voluntarily or through law, it would be the second increase in just over a year. In October 2004, the national assembly authorized an increase from 1% to the present 16.7%.

The 1% rate for the Orinoco projects, lower than the royalty for other oil ventures, was authorized by congress in the 1990s with the express intent of stimulating billion-dollar investments in the extra-heavy crude industry at a time when oil prices where around US$15/b and neither the national oil company PDVSA nor private companies were doing any major E&P in Venezuela.

According to the International Energy Agency, the four projects, which once produced some 600,000b/d of synthetic crude from 660,000b/d of extra heavy crude, are now at their lowest production point in at least two years. In January, synthetic crude production fell to 480,000b/d from 574,000b/d in December "due to plant maintenance," the latest IEA report states.

PDVSA has a sizable stake in each of the four projects: Ameriven, where it partners with ConocoPhillips (NYSE: COP) and Chevron (NYSE: CVX); Cerro Negro, where it partners with ExxonMobil (NYSE: XOM) and the UK's BP; Sincor with France's Total (NYSE: TOT); and Norway's Statoil and Petrozuata, again with ConocoPhillips.

About Business News Americas: Business News Americas is a multilingual news and business information service that covers the most important original stories in 11 different business sectors throughout Latin America everyday. Visit BNamericas to access our real-time news reports, 7-year archive, Fact File company database, and latest research reports. Click here for a Free two week trial to our Latin America Oil & Gas information service.

Related Companies
 Company: BP plcmore info


 - BP, India's Reliance To Invest $6B More In Offshore Gasfields (Jun 15)
 - Monroe Energy: BP Violated Contract When It Blended Texas Crude (Jun 12)
 - Global Carbon Prices Must Soar to Meet Paris Climate Target Report (May 30)
 Company: Exxon Mobil Corporationmore info


 - Exxon Says Scientists Boost Lipid Content From Algae In Lab Study (Jun 19)
 - ExxonMobil To Proceed With Development Of Liza Field Offshore Guyana (Jun 16)
 - Exxon Says NY Distorting Climate Record in Fraud Probe (Jun 9)
 Company: Statoilmore info


 - Statoil Denies Patent Infringement, Keeps Drilling In The Barents Sea (Jun 12)
 - Statoil Aims To More Than Triple Brazil Output (Jun 12)
 - Norwegian Union Threatens Strike At Statoil, Shell, Eni Pplatforms (Jun 6)
 Company: Total S.A.more info
 - Total Looks At Downstream In Morocco, S. Africa To Spur Gas Demand (Jun 8)
 - Total Asks to Revisit South Sudan Oil-Blocks, Minister Says (Jun 5)
 - Transporters Strike Causes Shortages at Petrol Stations in France (May 30)
 Company: ConocoPhillipsmore info


 - ConocoPhillips To Lay Off 300 In Canada After Cenovus Deal (May 4)
 - ConocoPhillips Posts Surprise Loss On Higher-Than-Expected Costs (May 2)
 - Deal Of The Month: ConocoPhillips Cuts Gas Profile in $3B San Juan Sale (Apr 28)
 Company: Chevron Corporationmore info
 - Grassroots Kazakhstan Base Oil Project Goes to CB&I (Jun 12)
 - No New Demand, More Supply Leaves Spot Price Languishing (May 26)
 - South Africa Wants Sinopec to Retain Refinery Capacity (May 25)
 Company: PDVSAmore info


 - Venezuela's PDVSA Says Cardon Refinery Cracker Working Normally (Jun 21)
 - Venezuela Looks Abroad for Fuel as Domestic Production Wanes (Jun 20)
 - Venezuelan Refinery Reels As PDVSA Ships Light Oil To Cuba, Curacao (Jun 6)
Events  SUBSCRIBE TO OUR NEWSLETTER

Our Privacy Pledge
SUBSCRIBE


Most Popular Articles


From the Career Center
Jobs that may interest you
Contract Landman
Expertise: Landman
Location: Denver, CO
 
Project Manager
Expertise: Contracts Administration|Planner / Scheduler|Project Management
Location: Henderson, CO
 
Logistics Supervisor
Expertise: Logistics Management
Location: Sugar Land
 
search for more jobs

Brent Crude Oil : $45.83/BBL 0.63%
Light Crude Oil : $43.38/BBL 0.86%
Natural Gas : $3.03/MMBtu 3.44%
Updated in last 24 hours