Posted on 05/08/2006 4:32:45 PM PDT by familyop
NEW YORK, NY, United States (UPI) -- As the rising price of oil drives up oil company profits, countries where the oil is drilled, such as Bolivia, are demanding more of a cut, a report says.
Bolivia, where the president authorized a national takeover of oil and gas fields and pushed up taxes, is only the most recent example.
Similar moves have taken place in Russia and Venezuela, while Britain has increased its taxes and state companies in Nigeria and Kazakhstan get better treatment than private companies, The New York Times reports.
Bolivia hiked its taxes on oil companies from 18 to 82 percent, Venezuela from 56.6 to 83 percent and both Ecuador and Britain to 50 percent.
As prices at the pump stay high in the United States and outcry over oil company profits gains traction, even Congress is talking about taxes on what it considers excess, the newspaper said.
The demands on oil companies from source countries is the 'byproduct of high prices,' said Leonardo Maugeri, a senior executive at Italian oil company Eni.
Maugeri said, 'In periods like this, producers think they have the upper hand, and probably they are right.'
He said when the price is low, countries don`t think they can demand the taxes from oil companies.
The problem with finding oil in a foreign country is the risk that the host country will breach the contract with you and swipe your stuff.
And, it's being considered here in the US as well.
83% of what? the market price of crude? I heard a guy on Air America advocating nationalizing American fields saying that oil companies pay nothing on oil priced above $55/bb. It is my opinion that it is the political instability that worries the markets.
In the case of Bolivia, 83% of the value of each barrel or it's equivalent in natural gas has now been deemed to be government property, and the government is taking control of 100% of the marketing of the product.
Depending on the wells involved, the 17% of the value might or might not covering the expenses of bringing the product to the surface, but it surely isn't enough to justify drilling a single new well or building a new pipeline. Bolivia just shot the goose that laid the golden egg.
As far as what Air America said, that's baloney and not even remotely correct.
Oh well, Bolivia has had over 200 governments since independance. When Morales was making his victory tour to other capitals, I said look quick, because he will be out soon, However, I have read this week that Castro is sending in his secret police. The idea that Cuba is invincible is ridiculous, of course. Maybe Brazil will get really mad at being stiffed.
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