Private oil exports on the rise

Daily Journal 
May 30, 2005

This is part of a series of re-published articles from The Daily Journal.

Private oil production is on the rise, reported El Universal on Monday. According to the Venezuelan Central Bank (BCV), foreign companies exported 18 percent of Venezuelan oil produced in the first trimester of 2005. These companies only accounted for 14.6 percent of production in the first trimester of 2005.
The news comes despite recent government accusations that foreign oil companies have evaded taxes and represent a threat to Venezuela's sovereignty. Efforts are underway to investigate the 32 operating agreements signed with the companies in the 1990s.
Starting this week, former presidents of state-run Petroleos de Venezuela (PDVSA) and former petroleum ministers will appear in front of a special National Assembly commission that is investigating the operating agreements. Jose Vielma Mora, the National Tax and Tributary Administration Service (Seniat) superintendent, is set appear at the commission on Tuesday at 3pm.
The BCV reported that the private sector accounted for $1.7 million of the $9.7 million in Venezuelan oil exports in the first trimester. The private sector only represented $1 million of oil exports in the same period last year. Sales for state-run Petroleos de Venezuela (PDVSA) also rose from $5.9 million in the first trimester of 2004 to $7.9 million in the first trimester of this year, an increase of 34 percent.
This growth is in part due to a 36 percent increase in Venezuelan oil prices, rising from $28.18 per barrel in the first trimester of 2004 to $38.39 in the first three months of this year. Yet the figures suggest that foreign companies have also increased production.
An OPEC report citing secondary sources said last week that Venezuela was producing 2.65 million barrels per day (bpd), even though PDVSA maintains that the country is producing 3.1 million bpd.
Indicators of falling production and accusations of corruption have affected the perception of Venezuelan bonds, reported El Universal.
Average OPEC oil prices rose each of five consecutive days last week, closing at $47.45 per barrel on Friday. While last week's prices were lower than the average April price of $49.63 per barrel, they were much higher than last year's prices, which averaged $36.05 per barrel.
The government has taken a hard-line with multinationals in what officials describe as a "battle" to defend Venezuelan oil resources.
President Hugo Chavez recently declared that his administration would recalculate the tax rate on the 32 operating agreements to 50 percent up from 34 percent. Also, Venezuela last October unilaterally upped royalties on four heavy-oil ventures in the Orinoco region to 16.7 percent from 1 percent.