I would like to point out a couple of things, things the public may already be aware of, but I would like to reiterate them. I have discovered two countries, with very little effort, demonstrating there has not, and I emphasize "not," been a decline in investment due to increased hydrocarbons taxation.
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In South America, considerable investment in Venezuelan hydrocarbons has continued, even though they have chosen to increase their production tax to as much as 50 percent. According to an article I read in LatAm Energy Journal Preview (March 2005), Spain's oil producer Repsol has doubled its investment, obviously identifying that there is considerable revenues to be made there. "Spanish oil and gas group Repsol YPF announced a major expansion in Venezuela, potentially doubling its reserves in the world's fifth-largest oil exporter while raising production there 60 percent."
In Bolivia, Shengli International Petroleum Development Co. of China recently announced plans to invest $1.5 billion in Bolivia's hydrocarbons sector over the next two to three years for 40-year projects.
I spent all of five minutes researching this issue, and discovered this. I have to ask myself one question: If there is supposedly a reduction in investment due to taxation, then why are these companies making rather large investments in hydrocarbons in South America, even though these countries have significantly increased their hydrocarbons taxes? I would speculate there is still an exceptional amount of revenue to be made.
BP, Anadarko and ConocoPhillips apparently seem to have a strong hold over our government in Alaska. I read a comment in the newspaper from one of our legislators about the intense lobbying by the oil companies here in Juneau. Not only lobbying, but what's the word for it, campaign donations to a very large number of our representatives. I hope the public is paying close attention to this issue, and takes into account during the election in November which legislators can be bought and which ones cannot. If you want to clean up corruption, vote new blood into office.
Mark L. Kline