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US firms reject Venezuelan deal
BBC
Two major US companies have rejected a deal that would keep them working in Venezuela’s most important oil field, according to state oil firm PDVSA. The government is taking over majority control of operations in the Orinoco Belt, as it extends state control.
PDVSA said four firms – BP, Chevron, Total and Norway’s Statoil – had signed deals to take minority stakes, but Exxon Mobil and ConocoPhillips had not. President Hugo Chavez set Tuesday as a deadline for foreign firms to agree.
In May, PDVSA took over control of exploration projects in the Orinoco Belt, which had been among the last privately-run fields in the country. It is the country’s most important oil area, with massive potential. There are proven reserves of at least 80 billion barrels, but there could be enough there to make Venezuela the world’s biggest source of oil.
President Chavez demanded that private companies hand over majority control to the state as part of a nationalisation drive. The six international firms working there had little choice, but there had been intense negotiation over compensation.
(26 June 2007)
Related: Chavez: Foreign Oil Firms Will Work His Way or Get Out (Rigzone).
Oil rises, Canada’s take doesn’t
Shawn McCarthy, Globe and Mail
World oil companies have hit a gusher in Canadian tax policy.
In the past five years, Canada is the only significant oil and gas producing country to actually reduce its share of oil revenues, the British consulting firm Wood Mackenzie says in a new study.
Many other oil-rich jurisdictions, including Britain and Alaska, have significantly increased their share of the revenue pie generated by rapidly rising global crude prices. But as a result of cuts to federal corporate tax rates introduced by the former Liberal government, oil companies have seen their tax bite reduced, relative to their overall revenues.
“What you’ve seen in a number of countries is that they have introduced additional taxes for oil companies, to get more of a share of the recent price upside,” Graham Kellas, Wood Mackenzie’s vice-president for petroleum economics, said in an interview Monday.
“But what’s happened in Canada is that . . . the tax rates that the companies face today and into the future are lower than they were when prices started to rise.”
(25 June 2007)
US demand for Canadian oil seen doubling in 8 yrs
Jeffrey Jones, Reuters
U.S. demand for Canadian oil is expected to double in the next eight years, and domestic use could jump 44 percent as Alberta’s oil sands output surges, the Canadian oil industry’s main lobby group said on Monday.
However, that production growth could be tempered by the same problems that have plagued the oil sands industry throughout this decade — labor shortages and inflation in the cost of materials like steel, the Canadian Association of Petroleum Producers said.
(25 June 2007)
