Report: Ministry Pushing for 20-30% Royalty

Venezuela's energy and oil ministry is proposing a new higher royalty rate of 20-30% for E&P oil projects, according to Caracas daily El Universal.

The Orinoco oil projects, which currently pay a 16.7% royalty, could pay the lowest new rate of 20%. The Orinoco projects produce between 500,000 barrels a day (b/d) to 600,000b/d of synthetic crude.

The maximum rate of 30% is envisioned for projects such as the new E&P joint ventures with state oil company PDVSA that are replacing the old operating agreements.

The new rates were presented last week before the national assembly, together with the contract model for the joint ventures. The 32 fields that will be covered by the new contracts produce some 500,000b/d of standard medium to light crude.

The 16.7% rate, however, would not disappear completely but could be applied to new projects that use bitumen from the Orinoco oil belt to make marketable mixes other than patented boiler fuel orimulsion. PDVSA is seeking a profitable way to phase out orimulsion, of which it still manufactures some 160,000b/d.

Bitumen has recently gained notoriety after both OPEC and the International Energy Agency (IEA) included it in the tally of Venezuela's total crude production.

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.

Events  SUBSCRIBE TO OUR NEWSLETTER

Our Privacy Pledge
SUBSCRIBE


Most Popular Articles


From the Career Center
Jobs that may interest you
Health & Safety Compliance Specialist III
Expertise: Environmental, Safety & Training|HSE Manager / Advisor|Regulatory Compliance
Location: Ignacio, CO
 
Law Clerk Job
Expertise: Legal|Secretarial or Administrative|Student / Recent Grad
Location: Minneapolis, MN
 
US Kilgore, TX: Transportation Foreman
Expertise: Logistics Management
Location: Kilgore, TX
 
search for more jobs

Brent Crude Oil : $50.56/BBL 0.15%
Light Crude Oil : $47.7/BBL 0.70%
Natural Gas : $3.05/MMBtu 1.32%
Updated in last 24 hours