Analysis: Caracas OK's windfall-profit tax
Published: April 16, 2008 at 1:48 PM
By CARMEN GENTILE
UPI Energy Correspondent
MIAMI, April 16 (UPI) -- Venezuela has approved a 50-percent tax on foreign oil companies for oil when priced at more than $70 a barrel, virtually guaranteeing billions of dollars in additional annual revenue for the foreseeable future.
The new law mandates the tax on foreign oil hit 60 percent when the barrel price exceeds $100 a barrel, a rate many experts believe will not be diminished in at least the coming year.
The move, according to Oil and Energy Minister Rafael Ramirez, could generate up to $9 billion annually.
The passing of the tax increase by the Venezuelan Congress, many members of which are ardent supporters of President Hugo Chavez, is seen as a major win for the Venezuelan leader who lost a referendum earlier this year that would have granted him additional executive powers including the ability to seek a third term in office.
That, coupled with Chavez's professed augmented powers over the oil and gas industry in Venezuela, has prompted widespread speculation among Venezuela experts.
...
http://www.upi.com/International_Security/Energy/Analysis/2008/04/16/analysis_caracas_oks_windfall-profit_tax/7948/
By CARMEN GENTILE
UPI Energy Correspondent
MIAMI, April 16 (UPI) -- Venezuela has approved a 50-percent tax on foreign oil companies for oil when priced at more than $70 a barrel, virtually guaranteeing billions of dollars in additional annual revenue for the foreseeable future.
The new law mandates the tax on foreign oil hit 60 percent when the barrel price exceeds $100 a barrel, a rate many experts believe will not be diminished in at least the coming year.
The move, according to Oil and Energy Minister Rafael Ramirez, could generate up to $9 billion annually.
The passing of the tax increase by the Venezuelan Congress, many members of which are ardent supporters of President Hugo Chavez, is seen as a major win for the Venezuelan leader who lost a referendum earlier this year that would have granted him additional executive powers including the ability to seek a third term in office.
That, coupled with Chavez's professed augmented powers over the oil and gas industry in Venezuela, has prompted widespread speculation among Venezuela experts.
...
http://www.upi.com/International_Security/Energy/Analysis/2008/04/16/analysis_caracas_oks_windfall-profit_tax/7948/
Stumble It!
http://www.zawya.com/story.cfm/sidZAWYA ... /pagKuwait
Canadian resources of oil and minerals
Could wipe out poverty, create an enviable education and health care system, support of the arts and culture and do just about what we dammed well pleased.
Can you imagine if we did the same in Alberta/Canada?
The ROC still pokes us in the ribs for 'Ralphbucks'. I guess it would have to be all of Canada getting HarperBucks, then they won't be so pissed off about it.
http://www.csmonitor.com/2006/0531/p04s01-woam.html
http://www.economagic.com/em-cgi/data.exe/doeme/paprpve
You're also conveniently ignoring the fact that the reason investment in Venezuela might be dropping off as they nationalize the industry is that Canada has a nice, open, un-nationalized industry so they can just come to us instead. If we (and others) nationalized our oil industry, that option would no longer exist, and oil companies would be forced to deal with nationalized oil everywhere. The US for example has openly said this re the SPP, that Canada has become key to the US energy security precisely because we AREN'T nationalizing our markets.
However, this is not necessarily good for us, since we get to keep much less of the profit the way things currently are (and speaking as a business person who works frequently in the oilfield, making more money is kind of the point of capitalism). Even Lougheed understood that the oil companies should pay more when they make more.
Oh, and incidentally, is high production really such a great idea? That's the general consensus in Alberta (get the oil out of the ground as fast as possible), when it might actually benefit us more to maintain production levels and NOT increase production from the oilsands five-fold in the next few years (as the US wants us to), one because that means we run out of oil faster, and two because that means we sell it all off before prices climb to their peak.
But "production" and "development" are two of those things you take on faith as ALWAYS being good, so I don't expect you to understand that Toro.
And what do windfall profits have to do with that? Windfall taxes only kick in when prices are high and the oil companies can afford to spread the love a little.
It has to do with people wistfully wishing we emulate Chavez. "Could you just imagine...!" This guy has done more to damage energy production in Venezuela than anyone, yet we should copy him? Is this a joke?
In a country with heavy oil reserves that may be larger than Saudi Arabia and Canada, during a time when the price of oil has risen from $15 to $115, production has , and you blame the oil companies???
Production in Venezuela is falling because Hugh is taking maintenance capital expenditure funds from PdVSA and using it to increase government spending (in a country swimming with oil which has a fiscal deficit of 5% of GDP, a figure higher than in America where the apocalyptic doom and gloomers tell us the dollar is on the verge of collapse). It is falling because the cost of business keeps rising in Venezuela due primarily to the rising cost of doing business with the government through expropriation and higher taxes. Production is falling because he fired many highly technical workers and stuffed the company with his political cronies. These are all policies instituted by Hugh.
I believe Venezuela is the only OPEC country to see oil production fall over the past five years, with the exception of Iraq, which, if you didn't know, was invaded and in the midst of a civil war. And most OPEC countries have national oil companies.
Chavez is incompetent. His policies are directly leading to food shortages and soaring inflation. He's making the same basic mistakes that uneducated leaders have made in the past. You can and could see what is coming a million miles away. Its like watching a bad B-movie. Venezuela is Zimbabwe with oil. Yet whoa, let's dream about Chavez!
Canada isn't becoming a key supplier because we aren't nationalizing our energy resources, thank God. Its because we have a lot of oil! But make sure you throw in a reference about the SPP!
Oh, and incidentally, is high production really such a great idea? That's the general consensus in Alberta (get the oil out of the ground as fast as possible), when it might actually benefit us more to maintain production levels and NOT increase production from the oilsands five-fold in the next few years (as the US wants us to), one because that means we run out of oil faster, and two because that means we sell it all off before prices climb to their peak.
Oil companies are paying more in taxes.
lol
Oh, yeah, you bet Thompson. Haven't they paved Kananaskis yet?
Now, excuse me, I have to go to my Club of Evil Capitalists meeting.
Chavez is incompetent. His policies are directly leading to food shortages and soaring inflation. He's making the same basic mistakes that uneducated leaders have made in the past. You can and could see what is coming a million miles away. Its like watching a bad B-movie. Venezuela is Zimbabwe with oil. Yet whoa, let's dream about Chavez!
Unfortunately for the Great Hugo's subjects, education has nothing to do with the mistakes he's making.
He's doing exactly what every despotic socialist leader has done for the past 100 years..............destroying his country to satisfy a warped and twisted philosophy that claims to make all men equal, but as we know, some are just a little more equal than others.
Production in Venezuela is falling because Hugh is taking maintenance capital expenditure funds from PdVSA and using it to increase government spending (in a country swimming with oil which has a fiscal deficit of 5% of GDP, a figure higher than in America where the apocalyptic doom and gloomers tell us the dollar is on the verge of collapse).
Great! More gimmicked stats from the Evil Capitalist.
GAAP-Based... GAAP-Based
Fiscal.............. "Official"......... Deficit Without. Deficit With
Year................. Deficit........... Soc. Sec.,.Etc.. Soc. Sec., Etc.
------------------------------------------------------------
2004.est...........$445 Billion.....$800 Billion.......$4.3 Trillion
2003.................$374 Billion.....$665 Billion.......$3.7 Trillion
2002.................$158 Billion.....$365 Billion.......$1.5 Trillion
------------------------------------------------------------
The real but not-generally-recognized GAAP U.S. deficit in 2003 was 34.2%. The gov't of the US is bankrupt - morally and financially. The only thing keeping y'all afloat is the greenback's role as the world's reserve currency. The only thing keeping the greenback AS the world's reserve currency is other nation's fear of their own currencies collapsing and the fear of a few thousand nuclear weapons.
He's doing exactly what every despotic socialist leader...
And just what is it that makes Chávez a despot?
I believe Venezuela is the only OPEC country to see oil production fall over the past five years, with the exception of Iraq, which, <b>if you didn't know</b>, was invaded and in the midst of a civil war.
Very funny. I think we all know that Iraq was invaded by the United States of Halliburton, and the civil war was fomented as part of the divide-and-conquer strategy so popular with the US and Israel.
Venezuela's production dropped because, as the Yanqui
If Chávez is such a prick then why did he provide low-cost heating oil to the poor of America? Why was there even a need to do this in the richest country on earth? Oops - formerly the richest country on earth. For the PR value? No, because the Bolivarians believe in solidarity with the world's poor and oppressed.
What's solidarity? It's a simple ethos that those in the capitalist world wouldn't understand but let me try to explain it: We don't fuck each other over for a dollar.
Here's the Halliburton chart since the start of the illegal Iraq invasion:
350% increase in 5 years? Not bad!!! Hope you bought in, Toro.
Production in Venezuela is falling because Hugh is taking maintenance capital expenditure funds from PdVSA and using it to increase government spending (in a country swimming with oil which has a fiscal deficit of 5% of GDP, a figure higher than in America where the apocalyptic doom and gloomers tell us the dollar is on the verge of collapse).
Great! More gimmicked stats from the Evil Capitalist.
GAAP-Based... GAAP-Based
Fiscal.............. "Official"......... Deficit Without. Deficit With
Year................. Deficit........... Soc. Sec.,.Etc.. Soc. Sec., Etc.
------------------------------------------------------------
2004.est...........$445 Billion.....$800 Billion.......$4.3 Trillion
2003.................$374 Billion.....$665 Billion.......$3.7 Trillion
2002.................$158 Billion.....$365 Billion.......$1.5 Trillion
------------------------------------------------------------
The real but not-generally-recognized GAAP U.S. deficit in 2003 was 34.2%. The gov't of the US is bankrupt - morally and financially. The only thing keeping y'all afloat is the greenback's role as the world's reserve currency. The only thing keeping the greenback AS the world's reserve currency is other nation's fear of their own currencies collapsing and the fear of a few thousand nuclear weapons.
Now do that same exercise for all the other developed countries, Burnsey, and you'll see that every nation is up shit creek without a paddle. And almost all are worse than America since almost every other OECD country offers more generous social programs and government provided medical services, and America has a higher rate of population growth than almost every other developed country. Thus, the pension and medical liabilities down the road for America look pretty good compared to most everywhere else.
Oh, but wait, we only apply these standards to America!
Now do that same exercise for all the other developed countries, Burnsey, and you'll see that every nation is up shit creek without a paddle. And almost all are worse than America since almost every other OECD country offers more generous social programs and government provided medical services, and America has a higher rate of population growth than almost every other developed country. Thus, the pension and medical liabilities down the road for America look pretty good compared to most everywhere else.
That's a lame trick - if I refuse to do the work then you seemingly have won your argument.
YOU do the same exercise - it's your point.
If you're looking for some better data then you can find it here:
http://www.shadowstats.com/section/primers
This info comes from Walter J. Williams. Born in 1949, he received an A.B. in Economics, cum laude, from Dartmouth College in 1971, and was awarded a M.B.A. from Dartmouth's Amos Tuck School of Business Administration in 1972, where he was named an Edward Tuck Scholar. During his career as a consulting economist, John has worked with individuals as well as Fortune 500 companies.