Yesterday Venezuela increased the taxes on foreign oil companies operating in its huge southeast Orinoco heavy crude belt. Venezuelan President Hugo Chavez called a drive to tighten sovereign control over those petroleum resources. He calls it ?an act of justice and sovereignty".
Chavez said he was raising the exploitation tax on several oil ventures in the Orinoco belt to 16.6 percent from the current level of 0 percent to 1 percent, which he criticized as "negligible."
Venezuela, the world's No. 5 oil exporter, had been negotiating with its U.S. and European partners in the Orinoco to ensure that future projects fell in line with a 2001 hydrocarbons law raising existing royalty and tax levels.
But Sunday's decision came as a surprise as it had been understood that the more recent legislation would not affect existing operating contracts.
Energy Minister Rafael Ramirez defended the move, saying that was absolutely legally.
