Exxon Argues With Venezuela

Exxon Mobil is considering arbitration to challenge Venezuela?s recent increase of oil royalties from 1% to 16.66%.

The increased royalties are expected to raise oil revenue for the Venezuelan state from $46 million to over $750 million.

Venezuela?s president Hugo Chavez raised oil royalties last fall. He considered the royalty increase to be justified because, first, the projects for which the 1% royalty had been negotiated had matured and, second, because the price of oil had reached historical heights that made such an increase affordable.

Last week Exxon Mobil said that it was interested in meeting with PDVSA President and Oil and Energy Minister Rafael Ramirez.
However, Ramirez turned down the request, saying that the decision to raise royalties would not be changed.