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Venezuela windfall tax to delay investment: Shell



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Reuters: Venezuela windfall tax to delay investment: Shell

Tue May 13, 2008 5:13pm ED


LA JOLLA, Calif., May 13 (Reuters) – The imposition of a new windfall oil profits tax will delay a planned expansion of Royal Dutch Shell Plc’s (RDSa.L: QuoteProfile,Research) operations in Venezuela, a Shell executive said Tuesday.

“It is something we are still trying to understand. We are going to have to study the new tax first,” said Olivier Lazare, a new business manager for Shell’s upstream arm.

The $9 billion windfall tax passed in April by Venezuela’s National Assembly boosts the government’s take from oil production to at least 92 percent of all the revenue earned above the $70-a-barrel threshold .

Shell and Venezuela agreed in January to study the expansion of area operated by Petroregional del Lago, a joint venture between Venezuela’s state oil company PDVSA and Shell.

Venezuela has proposed incorporating acreage in Lake Maracaibo north of Petroregional’s Urdaneta West block into the joint venture.

The Petroregional mixed company was formed after Venezuela forced Shell to migrate an oil field operating contract awarded in the 1990s to a mixed company structure.

Shell owns 40 percent of the joint venture. PDVSA holds the remaining 60 percent interest. (Reporting by Robert Campbell; Editing by Christian Wiessner)


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