Nationalization of oil supplies
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The nationalization of oil occurs as countries begin to deprivatize oil production and with-hold exports. Kate Dourian, Platts' Middle East editor, points out that while estimates of oil reserves may vary, politics have now entered the equation of oil supply. "Some countries are becoming off limits. Major oil companies operating in Venezuela find themselves in a difficult position because of the growning nationalization of that resource. These countries are now reluctant to share their reserves."[1]
Kate Dorian of Platts has noted that "some oil-rich countries are restricting oil sales outside of their country. These countries are now reluctant to share their reserves."[1] According to consulting firm PFC Energy, only 7% of the world's estimated oil and gas reserves are in countries that allow companies like ExxonMobil free rein. Fully 65% are in the hands of state-owned companies such as Saudi Aramco, with the rest in countries such as Russia and Venezuela, where access by Western companies is difficult. The PFC study implies political factors are limiting capacity increases in Mexico, Venezuela, Iran, Iraq, Kuwait and Russia. Saudi Arabia is also limiting capacity expansion, but because of a self-imposed cap, unlike the other countries.[2] As a result of not having access to countries amenable to oil exploration, ExxonMobil is not making nearly the investment in finding new oil that it did in 1981.[3]
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[edit] Mexico
Mexico nationalized its oil industry in 1938, and has never privatized, restricting foreign investment. Since the giant Cantarell field in Mexico is now in decline, the state oil company Pemex has faced intense political opposition to opening up the country's oil and gas sector to foreign participation. Some feel that the state oil company Pemex does not have the capacity to develop deep water assets by itself, but needs to do so if it is to stem the decline in the country's crude production.[4]
[edit] Venezuela
Major oil companies operating in Venezuela have had difficulty with the spreading resource nationalism. Exxon Mobil and ConocoPhilips have said they would walk away from their large investment in the Orinoco heavy-oil belt rather than accept tough new contract terms which raise taxes and oblige all foreign companies to accept minority shares in joint ventures with the state oil company, Petróleos de Venezuela (PDVSA).[5]
[edit] Iran
Iran, now among the world's leading crude-oil exporters, could become a net importer of oil within the next decade due to rising demand and slow-growing production.[6] Possessing the world's second-biggest proven reserves of oil, it infuriated its people when the government brought in petrol rationing on two hours notice.[7] Due to limited refinery capacity, it has discouraged gasoline usage. Shortly after the petrol/gasoline rationing, which has reduced demand in some areas by 20%-30%, it announced it will not be producing cars powered only by gasoline.[8]
[edit] Russia
In Russia, Vladimir Putin's government has pressured Royal Dutch Shell to hand over control of one major project on Sakhalin Island, to Russia's Gazprom in December. The founder of formerly private Yukos has also been jailed, and the company absorbed by state-owned Rosneft.[9] Such moves strain the confidence of international oil companies in forming partnerships with Russia.[6]
[edit] Alternative views
Commodities trader Raymond Learsy, author of Over a Barrel: Breaking the Middle East Oil Cartel, contends that OPEC has trained consumers to believe that oil is a much more finite resource than it is. To back his argument, he points to past false alarms and apparent collaboration.[10] He also believes that Peak Oil analysts are conspiring with OPEC and the oil companies to create a "fabricated drama of peak oil" in order to drive up oil prices and profits. It is worth noting oil had risen to a little over $30/barrel at that time. A counter-argument was given in the Huffington Post after he and Steve Andrews, co-founder of ASPO, debated on CNBC in June 2007.[11]
[edit] See also
- Energy security
- Energy security and renewable technology
- Petroleum
- Peak oil
- U.S. Energy Independence
[edit] References
- ^ a b Non-OPEC peak oil threat receding (English). Arabian Business (2007-07-06).
- ^ Sheila McNulty. "Politics of oil seen as threat to supplies", Financial Times, 2007-05-09. (English)
- ^ Justin Fox. "No More Gushers for ExxonMobil", Time magazine, 2007-05-31. (English)
- ^ Ross McCracken. "IOCs, NOCs Facing Off Over Scarcer Resources", Platts, 2007. (English)
- ^ "It's our oil", The Economist, 2007-06-28. (English)
- ^ a b Mark Trumbull. "Risks of rising oil nationalism", Christian Science Monitor, 2007-04-03. (English)
- ^ Mark Colvin and Sabra Lane. "Iran's oil restrictions 'a warning for Australia'", Energy Bulletin, 2007-06-28. (English)
- ^ "Iran ends petrol-only car making", BBC, 2007-06-07. (English)
- ^ "Country Profile: Russia", BBC, 2007-09-17. (English)
- ^ OPEC Follies - Breaking point (English). National Review (December 4, 2003).
- ^ Rejecting the Real 'Snake Oil' (English). Huffington Post (2007-06-29).
