According to Angel Rodriguez, president of the Energy & Mines Commission of Venezuela's National Assembly, a new extraordinary gains tax or "windfall" oil tax of 50 percent will take effect in Venezuela when crude oil prices rise above $70 per barrel but do not exceed $100 per barrel. The tax will increase to 60 percent when crude oil prices exceed $100 per barrel.
Venezuela will use a monthly average of the daily highs and lows of the "Dated Brent" crude oil price in determining the price it will use to apply the new "windfall" oil tax.
The tax will be applied to conventional crude oil, upgraded crude oil or petroleum derivatives for export or transport outside of Venezuela's borders and must be paid in Venezuelan bolivars and within five days following the receipt by the companies of the corresponding tax forms from the Venezuelan government.
Upside Potential Capped At 40%-50% -- With the implantation of the this new "windfall" oil tax, the upside potential for multinationals when crude oil prices are between $70-$100 per barrel is capped at 50 percent, while the upside potential when crude oil prices exceed $100 per barrel is capped at 40 percent.
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