Mulva said it had yet to be officially notified of the changes in Venezuela, but was studying the proposals "pretty thoroughly". He added the impact could cut its production by about 20,000 barrels a day, below some analysts' estimates, though there is also concern that a new regime could damage the economic viability of other planned developments in the country. The combination of tax changes and rising costs are forcing oil companies to re-evaluate their capital expenditure plans, despite the boost to cashflows from high oil prices.
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Conoco CEO Is To Visit Venezuela
to discuss the effect of unwelcome planned tax changes
US oil major ConocoPhillips? CEO Jim Mulva is going to visit Venezuela to discuss the effect of planned tax changes which could cut the company?s production by 7.5m barrels a year.
Conoco's operations in Venezuela's heavy-oil region make it the most exposed of its peers to the surprise decision by President Hugo Chavez to raise the royalty rate on joint ventures from 1 per cent to 16.6 per cent.
Analysts believe it may be part of a trend by oil-producing countries to secure a larger share of the benefits of sustained high oil prices. In addition to changes in Russia's tax regime, there is speculation about new agreements in Nigeria, Chad and Kazakhstan.
Mulva said it had yet to be officially notified of the changes in Venezuela, but was studying the proposals "pretty thoroughly". He added the impact could cut its production by about 20,000 barrels a day, below some analysts' estimates, though there is also concern that a new regime could damage the economic viability of other planned developments in the country. The combination of tax changes and rising costs are forcing oil companies to re-evaluate their capital expenditure plans, despite the boost to cashflows from high oil prices.
Mulva said it had yet to be officially notified of the changes in Venezuela, but was studying the proposals "pretty thoroughly". He added the impact could cut its production by about 20,000 barrels a day, below some analysts' estimates, though there is also concern that a new regime could damage the economic viability of other planned developments in the country. The combination of tax changes and rising costs are forcing oil companies to re-evaluate their capital expenditure plans, despite the boost to cashflows from high oil prices.
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