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Last Updated: Friday, 12 August 2005, 21:48 GMT 22:48 UK
Venezuela-Shell tax row heats up
Oil pump in Lagunillas at the west coast of Lake Maracaibo
Maricaibo is one of Venezuela's most important oil producing areas
Venezuelan tax authorities have closed a Royal Dutch Shell office for 48 hours and asked for an injunction on some of the oil firm's assets in a tax dispute.

The row centres on a $131m (74m) bill for back taxes covering 2001-2004, presented to the oil giant in July.

Venezuela's tax authority said it had put a hold on Shell goods worth $131m and shut its office in Lake Maracaibo.

Shell is challenging the demand, which is part of a wider clampdown on alleged tax avoidance by foreign firms.

"Shell Venezuela reiterates that it has paid all taxes mandated by the law and complies with Venezuelan law," the company said in a statement.

Under the injunction, Shell will be prevented from exporting or selling the goods earmarked under the injunction as collateral in the tax dispute, Seniat - the country's tax authority - said.

Foreign deals probed

However, it did add that the oil giant would still be able to use the equipment.

Shell refused to comment on the injunction but did confirm that one of its offices had been closed, saying the measure would have "minimum impact" on its activities.

Venezuelan authorities have said that foreign firms may owe up to $3bn (1.7bn) in unpaid taxes resulting from deals agreed in the 1990s under the leadership of former President Rafael Caldera.

Current left-wing leader Hugo Chavez is seeking a greater hold over the oil industry, claiming that in the past, the country did not see enough benefit from its proceeds.

As a result, 22 oil companies - including Chevron, BP and Total - are now under investigation.

Venezuela, a member of the oil producers' cartel Opec, is the world's fifth-largest oil exporter.

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