By reuters

Venezuela will raise income tax on private oil projects to 50% as part of a campaign to increase revenue from its petroleum operations energy minister rafael ramirez said on sunday.

The president has announced that the seniat tax agency will reclassify taxes and a company that drills, produces, operates, or processes oil will have to pay income tax of 50% he told the local televen channel.

In an initial announcemnet left wing president hugo chavez on friday said income tax paid by foreign comapanies working in venezuela's orinoco extra heavy oil belt would increase to 50% from 34%.

The tax measures are the latest government squeeze on foreign companies working in the worlds no 5 oil exporter through deals signed in the 1990's before the tough talking nationalist president took office.

Venezuela last week ordered foreign businesses involved in 32 operating contracts to convert the deals to joint ventures under new terms set by a 2001 oil law. The law sharply increases royalties paid by foreign oil companies pumping in the orinoco region to 16.6% from previous minimum levels.