Venezuela Gives Total Until Thursday to Pay US$107mn Bill

Venezuela's Seniat tax authority will give French oil major Total (NYSE: TOT) until March 16 to pay at least some of the 231bn bolivares (US$107mn) the oil company owes in back taxes, Seniat director Jose Vielma told reporters on Tuesday.

Vielma said last week Total had until March 14 to pay or face fines and interest that could more than double the tax bill. However on Tuesday Vielma, who was speaking at a public function sponsored by the Miranda state government, said Total had until Thursday to pay.

Not only was the deadline extended, but Total also reached an agreement with Miranda state to cover part of the 231bn bolivares through the construction of unspecified public works, Vielma added.

Asked to describe how the negotiations where going, Vielma said Total has been treated with flexibility.

"This government doesn't trample on anybody's rights. But we will collect - we are giving them until Thursday and if they don't pay the taxes to Seniat, we will close down their administrative headquarters and their oil extraction operations for the first time ever," Vielma said.

A former captain in the paratroopers, Vielma has been close to President Hugo Chavez (his lieutenant-colonel while in the service) even before the two got involved in the February 27, 1992, coup attempt. Since Chavez's 1998 electoral victory Vielma has held a number of key positions in the Chavez administration.

Total officials in Caracas declined to comment on Vielma's statements. At the heart of the multimillion-dollar disagreement is a 2005 Seniat decision that said oilfield operators should pay 50% taxes retroactively for the 2000-2004 period instead of 34%.

The French company is involved in several high-profile E&P ventures in Venezuela, including a 47% stake in Sincor, a project to produce some 180,000 barrels a day of synthetic crude from the Orinoco oil belt.

Total also has a preliminary agreement to enter as a minority partner in a joint venture with state oil firm PDVSA to produce crude in eastern Venezuela. The French company is active offshore as well, exploring for natural gas in the Plataforma Deltana with Norwegian oil major Statoil (NYSE: STO).

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