Venezuela to Stop Reimbursing Oil Companies' Costs in Dollars

[Robbien]

May 15 (Bloomberg) -- Venezuelan President Hugo Chavez forbid the state oil company to reimburse in dollars the operating costs of international oil companies working in the country, one month after he raised their income taxes.

The measure affects 19 companies, including ChevronTexaco Corp. and France's Total SA, that operate 32 fields for state oil company Petroleos de Venezuela SA, Chavez said during his weekly broadcast from the southwestern state of Barinas. The companies had been reimbursed in dollars for domestic operating costs such as cars, food, travel expenses and clothing.

``This is a violation of our foreign exchange law,'' Chavez said. ``As of today, Petroleos de Venezuela won't pay one cent in dollars to those international companies. Absolutely nothing.'' Chavez didn't say how much money was involved or whether reimbursements would be made in bolivars, the local currency. A Petroleos de Venezuela spokesman declined to comment immediately.

. . .

Chavez said the contracts are structured in such a way that they deprive Venezuela, the world's fifth-largest oil exporter, of tax income needed to fund development projects. ``These contracts are perverse,'' Chavez said, charging that previous governments ``sold our sovereignity.'' Petroleos de Venezuela is now in talks with the companies to convert the contracts, which pay fees per barrel, into joint ventures in which the state oil company would hold 51 percent of the shares.

http://www.bloomberg.com/apps/news?pid=10000086&sid=aYgYzgVYYFuk&refer=latin_america

These companies have not been paying taxes because they say they operate at a loss in Venezuela, but now we see that Venezuela even pays for these crook's expenses, even clothing! What loss could there be if Venezuela is reimburing them for their expenses?

[killbotfactory]

1. That guy has cajones the size of Texas

Holy crap

[Robbien]

4. Chavez is showing the world the seamy side of the oil business

if they are doing this in Venezuela, we can assume they are doing it in Africa and other SA countries.

The Shell and Exxon faction of BushCo must be very angry.

[eleny]

2. I'm humbled by his bravery

[GirlinContempt]

3. Yes yes yes

Finally. He's stepping up.

[Robbien]

6. I figure he is trying to act fast on everything now

and get reforms in place fast just in case the BushCo regime gets to him.

[GirlinContempt]

8. Doubt it

He's been worried about it since Bush took power, would have made sense to start back then

[Robbien]

9. He couldn't because BushCo anti-Chavez people were

in all government, oil, court and management positions. It wasn't until after the recall that Chavez had the power to throw out all the anti-Chavez people and push his reforms.

[GirlinContempt]

10. But

he did start some back then. And I do agree with you, some of them had to wait until the government could be restructured. But I doubt he's pushing them all through out of fear of Bush.

[Robbien]

11. The situation in Bolivia right now highlights what Chavez had to face

before the recall. Right now it is the Bolivian people who are trying to push through reforms but business and government leaders are fighting them tooth and nail.

Also it is not just fear of Bush but BushCo, which is the whole cabal of global corporate elites. Those guys have a whole army of mercs which can do some very real damage to Chavez's reform movement.

[GirlinContempt]

12. Agreed.

[TahitiNut]

5. Excellent move.

It's insane for any country to pay foreign enterprises providing services in that country in other than that country's currency. No matter how those companies then convert that currency to one of their choice, it will eventually result in the spending coming back to the country. The specious rationale for global pricing of oil in dollars has been nothing but a scam to force eventual spending of those dollars in the US -- all too often in arms and munitions.

When it's a reimbursement for domestic expenses, it's INSANE to accommodate the exchange rate accounting. Report it (with receipts) in bolivars and reimburse it in bolivars! (I can't imagine the number of games those companies played with such cost accounting!)

[Karenina]

13. Ah yes, the "numbers game"

currently calculated in bits and bytes... :evilgrin:

"Shock and Awe" was about Saddam's conversion to the EURO!!! Chavez is SO MUCH MORE a "plain speaking" TRUTHTELLER than the blithering *blivet.

[Gregorian]

7. Sounds like they've had enough US BS.

Is Venezuela going NUKULAR, or what?

[GHOSTDANCER]

14. Chavez de largo vivo!!!!!!

[Eloriel]

15. This may be a bizarre comparison, but

I'm going to make it anyway.

I spent several hours this week watching some Elvis Presley stuff -- the end of the movie on Elvis (I thought it was great) and the documentary with Priscilla Presley, and even a documentary on PBS. Having lived through that era, I really still have to say: there's no one like Elvis. He was beautiful, special, dripped otherworldly-talent. No one will ever touch him. There will be other musical and celebrity avatars (the Beatles, possibly Rolling Stones, etc.), but Elvis is absolutely right up there in terms of the stellar category. I guess the criterion I'm using, now that I think about it, is that Elvis literally changed the world, as did the Beatles.

I think Chavez is in the same class in HIS category. Of course, we'll have to define it somewhat differently because it's very difficult for heads of state NOT to change the world.

[Robbien]

16. Wow, that was a bizarre comparison, but true

At first it was hard to see where you were going with the Elvis comparison, but you are right Chavez has grabbed hold of the world's populist soul just as Elvis did in the musical realm.

[entanglement]

17. It seems like Venezuela needs to be 'liberated', when do we attack? n/t

[jody]

18. Venezuela has major oil contracts with China and China is the largest

holder of US debt. China could bring our economy to its knees very easily. That doesn't leave Bush much room to maneuver and no chance for a preemptive invasion of Venezuela.

[NuttyFluffers]

20. last time i checked, it was japan.

@700+billion$ from japan
@180 billion$ from china (this after china sold off over half its USA debt holdings from $450 bil last fall)

dumping the rest would hurt, but when japan bails we'll collapse.

[Spazito]

19. I thought there was little that would surprise me anymore regarding..

the absolute greed and corruption of oil corporations but to find out that not only do they not pay taxes to Venezuela for Venezuela's oil, they have had Venezuela pay all their EXPENSES blows my mind. Chavez's ability to spell out the truth AND act upon it impresses me more and more every day.

[struggle4progress]

21. kick