ABSTRACT
This chapter was originally planned as a case study of the 1965-67 conflict between the Venezuelan government and the international oil companies that arose as a result of the government’s demand for additional income tax payments for the years 1958—60. But it was soon discovered that no part of Venezeula’s oil history can be analyzed in isolation. At first glance, the problem of the reparo, as the subject of the 1965-67 dispute was called, had a deceptively simple appearance. The Venezuelan government had refused to approve the oil companies’ tax returns for 1958 and the following years pending its investigation of the gross income data reported by the companies. Upon completion of its investigation in 1965, the government arrived at the conclusion that the companies had sold their Venezuelan oil at too low a price and that the gross income figures reported by them (while technically correct) were unacceptable for tax purposes. Consequently, claims for back taxes amounting to about $100 million were made against the companies. The companies took exception to these claims, and final agreement was not reached until 1967.
