Washington – First Russia. Then Venezuela. Now Bolivia.
Soaring energy prices are fueling a global wave of natural-resource nationalization that is souring the investment landscape for international oil companies and reshaping energy politics for years to come.
While it is anyone’s guess as to which energy-rich developing nation will be next to assert greater state control over its oil or natural-gas assets, analysts say it is only a matter of time before the actions of Russia’s Vladimir Putin, Venezuela’s Hugo Chavez and Bolivia’s Evo Morales inspire a copycat.
“If you’re an international oil company and see this trend, it must be worrying,” said Yasser Elguindi, senior managing director at Medley Global Advisors in New York.
It also should be worrisome to energy consumers when global supplies are already extremely tight, analysts said.
They noted that non-OPEC oil production has not lived up to its potential since 2003, when President Chavez began tightening his grip on Petroleos de Venezuela and, before that, President Putin jailed the ex-chief of Yukos, paving the way for its prized assets to be acquired by state-owned Rosneft.
As a result, world oil markets were even more vulnerable to supply disruptions stemming from violence in Nigeria, war in Iraq and hurricanes in the Gulf of Mexico.
On Tuesday, crude futures shot up to almost $75 a barrel as traders fretted about the possible outcome from escalating tensions between the West and Iran over its nuclear ambitions.
“High prices have given all producing countries a lot more leverage,” Elguindi said.
From a pure energy-supply perspective, Bolivia’s decision Monday to threaten seizing natural-gas fields from companies that refuse to renegotiate production contracts will have little impact on the world stage. But its symbolic significance cannot be understated, analysts said.
Coming on the heels of petroleum-sector power plays by political leaders in Russia and Venezuela, the grip-tightening in Bolivia underscores the rising influence of national oil companies and the increasing difficulty private companies face as the world’s energy hunting grounds become less hospitable.
Elguindi said oil giants, such as Exxon Mobil Corp. and Royal Dutch Shell PLC, already have begun shifting their businesses in response to the changing landscape. He said multibillion-dollar investments in Canada’s tar sands and Qatar’s natural-gas reserves are as much a reflection of the industry’s interest in these projects as they are evidence of companies “investing in things they have access to.”
“If you gave oil companies a choice between the tar sands in Canada or oil in Saudi Arabia, which do you think they’d choose?” Elguindi said.
