Financial Times: Shell to answer Venezuela tax charges
“Royal Dutch Shell must on Friday answer allegations by Venezuela that it has failed to pay $130m in back taxes…”
Posted Friday 5 August 2005
By Andy Webb-Vidal in Caracas
Royal Dutch Shell must on Friday answer allegations by Venezuela that it has failed to pay $130m in back taxes, a response that could have critical implications for several oil companies operating in the country.
The tax claim on Shell forms part of a campaign led by President Hugo Chávez to tighten control over private oil companies, which pump about 40 per cent of the output from the world’s fifth-largest oil exporter.
Mr Chávez and other officials have publicly claimed that multinationals owe as much as $3bn (€2.4bn, £1.7bn) in unpaid taxes, and in recent months Venezuela has increased tax and royalty rates on various types of oil ventures.
“In the past the government had conducted negotiations with private oil operators behind closed doors,” said Patrick Esteruelas, Latin America analyst at Eurasia Group in New York.
‘‘By publicly accusing private oil companies of tax evasion they are being put up against the wall.’’
Venezuela’s tax authority, known as Seniat, last month set a deadline of on Friday for Shell to formally respond to the demand for taxes allegedly unpaid between 2001 and 2004.
Europe’s second-largest oil company has denied claims of tax evasion but it must on Friday say whether it will pay or potentially face a 250 per cent penalty.
For Shell, Venezuela contributes only a fraction of its global oil production portfolio, and analysts say that the company may try to appease the authorities because it has other projects in the pipeline.
Shell is hoping to construct a $3bn petrochemicals plant with Petroleos de Venezuela, the state-owned oil company, and is negotiating the terms of its participation in the $2.7bn Mariscal Sucre offshore natural gas project.
But Shell’s response will set a precedent in the tax dispute with 22 foreign oil companies.
For some the position adopted by Shell will be critical. Harvest Natural Resources, a small Houston-based oil company, has been given an August 12 deadline to formally answer an allegation by the Seniat that it owes $85m in unpaid taxes, a claim it also rejects.
Harvest produces 21,000 barrels per day in Venezuela, and it is the company’s only source of income. Tax penalties could cripple Harvest.
‘‘We’ll proceed to international arbitration on all claims in full if we deem it necessary,’’ Peter Hill, Harvest’s chief executive officer, said this week.
‘‘It’s not our preferred route, but we’re prepared to take it if we have to.’’
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Royal Dutch Shell conspired directly with Hitler, financed the Nazi Party, was anti-Semitic and sold out its own Dutch Jewish employees to the Nazis. Shell had a close relationship with the Nazis during and after the reign of Sir Henri Deterding, an ardent Nazi, and the founder and decades long leader of the Royal Dutch Shell Group. His burial ceremony, which had all the trappings of a state funeral, was held at his private estate in Mecklenburg, Germany. The spectacle (photographs below) included a funeral procession led by a horse drawn funeral hearse with senior Nazis officials and senior Royal Dutch Shell directors in attendance, Nazi salutes at the graveside, swastika banners on display and wreaths and personal tributes from Adolf Hitler and Reichsmarschall, Hermann Goring. Deterding was an honored associate and supporter of Hitler and a personal friend of Goring.
Deterding was the guest of Hitler during a four day summit meeting at Berchtesgaden. Sir Henri and Hitler both had ambitions on Russian oil fields. Only an honored personal guest would be rewarded with a private four day meeting at Hitler’s mountain top retreat.
IN JULY 2007, MR BILL CAMPBELL (ABOVE, A RETIRED GROUP AUDITOR OF SHELL INTERNATIONAL SENT AN EMAIL TO EVERY UK MP AND MEMBER OF THE HOUSE OF LORDS: 
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A head-cut image of Alfred Donovan (now deceased) appears courtesy of The Wall Street Journal.
