Authorities Move to Seize Shell Assets in Tax Dispute

Venezuela's Seniat tax authority has filed a petition with a Zulia state judge to seize assets belonging to Anglo-Dutch oil company Shell to ensure the company pays 280bn bolívares (US$130mn) in back taxes, a Seniat official told BNamericas.

"It's a precautionary measure [to ensure payment], but for all official purposes we are embargoing them," the official said.

Shell was served with the claim in July and in a press release on Thursday afternoon Seniat said the stern measures were taken after the company failed to pay up.

"Once the tax administration realized that the oil company was not voluntarily accepting our request, a fiscalization procedure was initiated," the statement said.

No assets have yet been removed from Shell's offices in Zulia state's capital Maracaibo, the official said, but the oil major's employees cannot access the offices since Seniat ordered them closed for 48 hours on Wednesday afternoon.

Seniat says Shell did not pay all the taxes it should have from 2001-2004. Shell officials declined comment when contacted by BNamericas.

US-based Harvest Natural Resources and Italy's Eni have been served with similar tax claims from Seniat. The audits are part of the oil sovereignty plan that President Hugo Chávez's administration began implementing this year after months of decrying the condition under which previous presidents had allowed foreign oil companies to operate in the country.

As part of the plan state oil firm PDVSA and the energy and oil ministry in April ordered foreign oil companies in 32 operating agreement to migrate to joint ventures controlled by PDVSA by the end of the year.

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.