1033The Mineral Industry of 
Venezuela 
By Doris M. Hyde1 
 
 
 In 1978 and 1979, petroleum accounted for 63% and 65%, respectively, of
total Government revenue earnings as compared with 71% in 1977. Revenue contributions
from other segments of the mineral industry were modest. Import expenditures
on industrial expansion in steel, aluminum, and hydropower continued and
contributed to a 1978 adverse balance of trade estimated at $1.5 billion,
as opposed to about $289 million in 1977.2 Although imports declined by $400
million in 1979, it was the upward price spiral of petroleum exports that
accounted for an estimated $4 billion positive tradebalance. 
 In real terms, the gross domestic product (GDP) grew by 4.9% in 1978 and
by 4% in 1979. The mineral export sector, primarily the petroleum industry,
accounted for 9.2% of the real GDP in 1978 and 9.6% in 1979. 
 Despite the $613.9 million spent in 1977, the $1.0 billion in 1978, and
the $1.5 biliion spent by the petroleum industry in 1979, light- and medium-gravity
crude oil productive capacity has continued to decline. New discoveries of
light oil in the Maracaibo region have slightly increased reserves, and offshore
drilling in 1979 showed promise of additional light oil and natural gas reserves.
As crude oil prices continue to increase and market conditions warrant, marginal
fields containing as much as 7 billion barrels of recoverable reserves may
be brought back onstream. 
 Expansions underway in the steel industry are expected to be completed by
1980. Final planning for the steel complex in the State of Zulia, near Maracaibo,
made slow progress in 1978 and 1979, partially attributed to a hesitancy
on the part of the Government to commit itself to large capital investments
in the face of a number of 
uncertainties. 
 Government Policies and Programs.— Ministry of Energy and Mines
Resolution
148 of March 21, 1978, detailed implementation procedures for changes in
the mining law established by the February 1977 issuance of Presidential
Decree No. 2039. These new regulations detail the procedures and requirements
the applicant must follow to obtain prospecting licenses and, subsequently,
exploration and mining concessions. Financial and technical competence must
be documented by applicants. Development plans are also required, which may
offer special advantages, such as worker training and maximum use of Venezuelan
technical services and equipment. 
 It was anticipated that the new regulations will permit an exhaustive evaluation
of Venezuela's mineral resources. The Government also expected them to eliminate
the former practice of some concession holders of retaining their concessions
with no incentive for timely development. 
 In June 1978, the Venezuelan Income Tax Court upheld a 1976 claim by the
Comptroller General against American Petrofina of Venezuela for outstanding
assessments due under the Comptroller's interpretation of legislation enacted
in December 1970 and implemented in March 1971. In October 1979 the Venezuelan
Supreme Court refused to hear Petrofina's appeal. The controversy stemmed
from a general understanding on the part of the foreign oil companies that
the higher level of reference pr(ces used as a basis for tax levies would
be effective for the year 1971. The Comptroller ruled that the legislation
was retroactive and, therefore, also applied to 1970. The additional assessment
claim of $23,225 against Petrofina may be significant as a