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Venezuela slaps Sincor with royalty



By Upstream staff 

Venezuela will impose a 30% royalty on production from its Sincor heavy oil project, according to Energy Minister Rafael Ramirez.

The project, which partners state oil firm PDVSA with France's Total and Norway's Statoil, produces 210,000 barrels of oil per day, surpassing the authorised 114,000 bopd output in heavy crude upgrading.

The current royalty is 16.6% for heavy crude projects in the country's Orinoco oil belt. "We will start by charging this association a royalty of 30% for every barrel in excess of the authorised 114,000 barrels per day. We are preparing to do that," Ramirez said.

The increase is the latest move in a campaign by President Hugo Chavez to gain more control over the energy sector and increase revenues to fund social reforms.

In March Chavez said the Sincor project would double its output this year. He also said he had tentatively approved a second heavy oil deal with Total, Reuters reported.

The four Orinoco projects produce around 617,000 bopd of crude. A Sincor spokesman could not immediately be reached for comment.


Wednesday, 25 May, 2005, 19:02 GMT  | last updated: Wednesday, 25 May, 2005, 20:32 GMT

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