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Extraordinary and Exorbitant Prices in the International Market of Hydrocarbons

The Law of Partial Amendment to Decree No. 8,807, with Rank, Value and Force of Law that creates a Special Contribution for Extraordinary Prices and Exorbitant Prices in the International Market of Hydrocarbons (the “Decree”), was published in Official Gazette No. 40,114 dated February 20, 2013.

 

The Decree repeals Decree No. 8,807 with Rank, Value and Force of Law of Partial Amendment to the Law that creates a Special Contribution for Extraordinary Prices and Exorbitant Prices in the International Market of Hydrocarbons, which was published in Official Gazette No. 39,871 dated February 27, 2012 (the “Repealed Decree”).  Likewise, the Decree repeals the provisions of the Venezuelan Central Bank Law, published in Official Gazette No. 39,419 dated May 7, 2010, which regulate the contribution of Petróleos de Venezuela to the National Development Fund (“FONDEN”), and any other provision conflicting with the Decree.

 

The Decree defines extraordinary prices as those for which the monthly average of the international prices of the Venezuelan liquid hydrocarbon basket is higher than the price established in the Financial Plan Law of the corresponding fiscal year, yet equal to or lower than eighty dollars per barrel (80.00 US$/b).  The Decree modified the Repealed Decree, which established that the monthly average should be equal to or lower than seventy dollars per barrel (70.00 U$/b).

 

Additionally, the Decree defines exorbitant prices as those for which the monthly average of the international prices of the Venezuelan liquid hydrocarbon basket is higher than eighty dollars per barrel (80.00 US$/b); meanwhile, the Repealed Decree established that said average had to be higher than seventy dollars per barrel (70.00 U$/b).  Likewise, the Decree establishes the new percentages applicable to the special contribution for extraordinary and exorbitant prices, according to the provisions of the Decree.

 

The Decree creates the exemption from the contributions established therein for the activities related to exportation with purposes of transferring liquid hydrocarbons, derived from the execution of projects of new reservoir developments; as well as for the exportation of volumes in compliance with International Treaties of cooperation or financing.  In the Repealed Decree, the exemption included activities related to exportation plans approved in ongoing projects, while the totality of the investment was not restored.

 

Finally, the Decree establishes that eighty dollars per barrel (80.00 US$/b) shall be the maximum price for the calculation and liquidation of Royalties, Extraction Taxes and Export Registration Tax provided in the Hydrocarbon Organic Law.  The maximum price established by the Repealed Decree was up to seventy dollars per barrel (70.00 U$/b).

 

In order to access the Resolution, please click here.

 

“NOTE: THIS INFORMATION SHOULD NOT BE CONSTRUED AS LEGAL ADVICE ON ANY SPECIFIC MATTER AND ITS CONTENT ARE INTENDED AS A MANAGEMENT ALERT AS TO CURRENT DEVELOPMENTS IN VENEZUELA, ANY SPECIFIC LEGAL QUESTIONS REGARDING THE POSSIBLE APPLICATION OF NEW OR PROPOSED LEGISLATION TO PARTICULAR SITUATIONS SHOULD BE ADDRESSED TO TRAVIESO EVANS ARRIA RENGEL & PAZ.”