Venezuelan President Hugo Chavez announced that he would be increasing the royalties the government would charge for oil drilling along the Orinoco oil belt in the country's southeast. The move surprised corporate executives who had not received prior notice of the royalty increase. A former director of the state petroleum corporation warned that oil multinationals might sue over the hike while Chavez boasted that it would add large amounts of revenue to his social-benefits programs. Orinoco project royalties go from 1% to 16.6% "There will be no more petroleum given away," announced Chavez on his weekly radio and television broadcast. The increase would strip a tax holiday that had been established in the mid-1990s to encourage the development of heavy-crude projects along the Orinoco river corridor, dropping royalties companies would have to pay to between 0% and 1%. Chavez announced an increase to 16.6%, saying it was part of "the true nationalization of the petroleum industry."
NotiCen. "Venezuela Increases Royalty Fees For Oil Drilling Greatly." (2004). http://digitalrepository.unm.edu/la_energy_notien/187