THE ASSOCIATED PRESS
The New York Times
April 16, 2008
CARACAS, Venezuela — Venezuela moved Tuesday to take a greater cut of windfall oil profits, approving a 50 percent tax on foreign oil companies when crude tops $70 a barrel.
The tax rate would rise to 60 percent when the average monthly price for benchmark Brent crude exceeded $100, according to the bill approved by Venezuela’s National Assembly. The legislation will take effect as soon as it is published in the official gazette.
Revenue from the tax could reach $9 billion annually, Venezuela’s oil minister, Rafael Ramírez, said.
The legislation will let President Hugo Chávez further extend state control over foreign oil companies operating in Venezuela.
Juan Carlos Sosa, an analyst and editor of the Venezuelan oil industry magazine PetroleoYV, said the measure “is going to force foreign companies to think twice about making new investments” in Venezuela, “because their opportunities to turn a profit are diminishing.”