National Interests vs. Shareholders Value
One of the highlights in the current oil and gas news is of course the nationalisation of the Bolivian energy (and
later mining) industry.
Bolivia, with large gas-reserves and extensive gas exports, has not been able, or allowed, to rise from abject
poverty, notwithstanding its valuable resources, and has now declared that its resources belong to the people first
who therefore should also reap the benefits from it.
Bolivia is only one in a growing amount of countries that see that free trade, multinational oil-companies, large
financial institutions and globalisation may be good for the world, or for share-holders, but that the benefits for
them are quite, or very, limited. This seems especially the case with countries that have many resources but are
still early on the development ladder of international trade and finance. The result is that we see these countries
entering in deals that would not be possible in other parts of the world, often with contracts that are very
advantageous for the companies and institutions developing the resources with, in comparison, not much left for the
country and its people.
As we can see now, this is a situation that is waiting to be changed in the coming years and decades. Resource-rich
countries will wake up quickly to the changing world order and the changing energy environment and subsequently their
negotiation-position and put aside "regimes" (financial, legal) that they consider not anymore of this time and not
favourable for their country and its people.
It is a sign of the times that this is happening and a wake-up call to a new realism that we are using up ever more
resources whilst ever less is there, concentrated in ever fewer countries. These countries will want to take care of
themselves first, and develop their potential and that from their people. Because in the end: who cares about some
far-away share-holders value if you are living in slums?
Alexander
As always: responses are welcome at Alexander@gas-oil-power.com
