Rafael Quiroz on Orimulsion

October 5, 2003


 


Rafael Quiroz, a Professor of Economics at Central University, who nobody can accuse of being anti-Chavez, wrote an article in today El Nacional (by subscription only) about Orimulsion and the Governments decision to scale back the program. Some highlights:


 


-          Orimulsion has become itself a source of national pride, because its conceptualization. Research, development, manufacture and commercialization are 100% Venezuelan. It is the only successful example, in the hydrocarbons area, which has flowered in Venezuelan land.


-          They are pretending to change the definition of Orimulsion from natural bitumen to extra heavy oil, with all the international implications this has. In the past, Venezuela made great efforts to demonstrate that it was a natural bitumen and thus not subject to the taxes imposed on oil.


-          The offensive against Bitor and Orimulsion under the excuse that it is less profitable than the strategic associations, which is not true, because Bitor has a profitability of 20% has had earnings and has paid more for royalty taxes and income taxes than the Orinoco Oil belt associations, which are exempt from income taxes and have a royalty regimen under which they only pay 1% for ten years. Thus there is no apparent reason unless they want to hand out the Orinoco Oil Belt to multinationals to produced fuel oil.  


 

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