Venezuela 'to tax oil windfall'

Venezuela wants more control of its oil industry

Venezuela is planning a windfall tax on what it calls "excessive" profits of energy firms to allow state revenues to benefit from high oil prices.

The tax will take 50% of oil revenues above $70 per barrel, and an additional 60% of revenues over $100 per barrel, legislator Angel Rodriguez said.

He told state news agency ABN that oil firms had surpassed "reasonable levels of profitability".

The move will affect foreign oil firms operating in Venezuela such as Chevron.

Oil is currently trading above $104 per barrel.

'Excessive earnings'

The proposed tax comes months after President Hugo Chavez's nationalisation drive forced out two of the world's largest energy companies - Exxon Mobil Corp and Conoco Phillips.

Exxon is seeking $12bn in compensation from Venezuela after its oilfields were nationalised last year.

The tax will also apply to state oil company PDVSA, which now controls all of Venezuela's oilfields.

"Because of high oil prices, oil companies have excessive earnings that go beyond reasonable levels of profitability," Mr Rodriguez was quoted by Reuters as telling state news agency ABN.

"One way to distribute them to our people, who are the owners of the oil, is to create this tax."

Mr Rodriguez said the measure would get initial approval from the country's Congress this week.