ExxonMobil 'Concerned' About Orinoco Tax Increase


US oil company Exxon Mobil (NYSE: XOM) is "concerned" about Venezuela's "unilateral" increase in income tax rates at Orinoco extra heavy crude E&P projects, the company said in a statement.

Exxon Mobil has a 41.7% stake in the Cerro Negro JV, one of four E&P projects operating in Orinoco. Venezuela's national assembly has approved plans to up taxes for the four projects from 34% to 50%.

Orinoco projects produce some 620,000 barrels a day (b/d) and state oil firm PDVSA has said it hopes to double that figure by the year 2012.

That production goal would entail investments of US$16bn, according to PDVSA, which wants private partners pick up at least 40% of that.

PDVSA will hold an average 51% stake in all four Orinoco projects by year-end, state news agency ABN quoted acting energy and oil minister Bernard Mommer as saying earlier this week.

PDVSA holds 41.7% of Cerro Negro and the UK's BP (NYSE: BP) the balance.

The project's crude is then shipped to Louisiana's Chalmette refinery, where Exxon Mobil and PDVSA each control 50%.

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