Chevron, the second-largest U.S. oil company, said it must consider Venezuela's new oil tax as it plans new investments in South America's largest oil producing country. The company said it will not drop any current projects in Venezuela, but there has been speculation that the new tax could hamper production in oil-rich Orinoco region.
In April, Venezuela changed its old oil tax system for a new system that charges a levy of 80 percent or 95 percent on revenue above $70 and $100 a barrel, according to Bloomberg News. California-based Chevron (CVX) is targeting output of 50,000 barrels per day in Orinoco by September 2012, according to Venezuela press reports.
Production in the Carabobo fields may increase by 50,000 to 100,000 barrels every two year once initial production is started, Bloomberg reported. Venezuela has several new projects it is looking to bring online in the near future if it can secure investment from foreign oil companies, something that is not guaranteed given Venezuela's tax plans.
Venezuela, an OPEC member, s also counting on $5.5 billion in loans this year from Chinese and Italian banks to help it boost investment in its oil industry.