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|[[Image: Hugo_Chavez.jpg|thumb|right|250 px|Hugo Chavez explains the recent trends in oil prices]]||[[Image: Hugo_Chavez.jpg|thumb|right|250 px|Hugo Chavez explains the recent trends in oil prices]]|
|[[Image: Putin.jpg|thumb|right|300 px|If you could just put the oil right here...]]||[[Image: Putin.jpg|thumb|right|300 px|If you could just put the oil right here...]]|
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In Venezuela, oil generates 80% of the country's total export revenues and contributes 50% of total government income. Oil accounts for 95% (!) of government revenues in Nigeria and 76% of government revenues, and the it accounts for 60% of export revenues in Russia. It's little wonder that these countries leaders want to control this key resource and source of government revenues. Imagine if this were the fiscal scenario in the U.S. and the U.S. Congress were looking for new sources of revenues to fund social programs like Social Security or Medicaid -- isn't it likely that Congress, always fearful of hiking taxes, would, look to a great money-generator such as oil for a few extra dollars? Especially if much of the oil output were not going towards U.S. consumption, but rather was being exported, say, to China.
Of course, as a democracy and a country where property rights are inherently supported, such nationalism is rare. However, recent rising oil and gas prices have only added to geo-political instability in the world's oil- and gas-producing regions. Energy nationalism in practice can mean everything from expropriation of assets (e.g., in Bolivia, where natural gas assets have been literally taken over by government) to heavy-handed negotiations of royalties with foreign investors. The former is viewed negatively, while the latter is somewhat par for the course in developing oil and gas assets. The average government take from local oil projects, in terms of royalties, tax revenues, etc., is 60% of total revenues generated, so governments are tending to get their share.
The crux of the problem is that the top oil and gas producing countries are generally "riskier" than the average country for foreign investment. As oil and gas prices go up, one can expect this risk to increase. See, for example, the charts at left, compiled from EIA and Transparency International data, demonstrate the real risk that the world runs every day it keeps pumping oil and gas. The rank is awarded by Transparency International for the country's "perceived corruption", where a rank of "1" indicates the world's least corrupt country (Finland, by the way), and a rank of "163" indicates the world's most corrupt country (Haiti, which unfortunately has limited natural resources on top of it's corruption problem).
Historically, oil and gas exploration was a "foreigner's game," with major Western oil and gas firms scouring the globe for the next great energy finds. Co-production and royalty agreements were common, but local governments typically required the deep pockets and expertise of foreign firms to assist in developing their oil assets. High oil prices, years of training and development of local expertise, and new competitions from other interested players (e.g., China) have shifted negotiating power to local governments. As a result, the National Oil Company (NOC) is on the rise again, with 17 of the top 20 oil producing companies in the world either state-owned NOCs or newly privatized former NOCs.
The companies who stand to benefit from nationalization and/or global instability are those without exposure to the riskiest regions. For example, STATOIL ASA (STO), Norway's leading oil company, is reasonably insulated from the nationalization trend.
Most of the integrated oil majors have presence anywhere there may be oil, and certainly among the top oil exporting countries. For example, the top five oil producing companies in Nigeria include Shell (900,000 bpd), Exxon Mobil (XOM) (500,000 bpd), and ChevronTexaco (CVX) (465,000 bpd). Of these, Shell probably has the most country risk in Nigeria at least, given its long history of problems and turbulence in the Niger Delta.
Petrobras, which has significant investment throughout Latin America, is particularly exposed to nationalization in Chavez-friendly countries such as Bolivia. Petrobras took a hit when Evo Morales nationalized Bolivia's hydrocarbon (aka oil and gas) industry in May. Bolivia has the second largest natural gas reserves in Latin America, behind Venezuela.