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Players honour Venezuela back-tax claim



By Upstream staff 

Most of the 22 foreign oil companies faced with back-tax claims in Venezuela have agreed to pay up, the country's tax agency chief has said.

In comments reported yesterday by the state-run Bolivarian News Agency, tax agency chief Jose Vielma Mora said officials will hold a meeting this Thursday with diplomats and oil company representatives to discuss the payments.

He said most of those companies have already decided to pay up.

Officials have estimated the amount owed by producers with 32 operating agreements in Venezuela at $2 billion for a period spanning the past 10 years, Vielma Mora said.

Oil Minister Rafael Ramirez has previously said companies that run the agreements owe $3 billion in back taxes, and that players with heavy crude upgrading projects in the Orinoco tar belt owe more than $1 billion in unpaid royalties.

Representatives of major oil companies operating in Venezuela have yet to announce how they will respond to the back-tax claims.

However, Shell chief executive Jeroen van der Veer told reporters in Washington last week that the company would readily put more money in Venezuela to add to its investment in oil production if the investment climate is right.

"We have not taken a specific decision about recently-announced tax changes," Van der Veer said. "But of course our people over there will discuss that with the Venezuelan government."

President Hugo Chavez also recently announced the government would reclassify the income tax charged to oil companies operating in Venezuela to 50%, up from a previous 32% preferential rate, the Associated Press reported.


Monday, 30 May, 2005, 07:14 GMT  | last updated: Monday, 30 May, 2005, 12:46 GMT

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