Pursuing foreign investment for nationalist goals: Venezuela's hybrid resource nationalism

2018 ◽  
Vol 20 (3) ◽  
pp. 438-464 ◽  
Author(s):  
Antulio Rosales
Keyword(s):  
Foreign Investment ◽  
International Political Economy ◽  
Oil Prices ◽  
State Regulation ◽  
Resource Nationalism ◽  
Oil Sector ◽  
The Government ◽  
Control Association ◽  
Resource Sector ◽  
Constructivist Approaches

AbstractScholarship in international political economy (IPE) has noted the rise of resource nationalism in since the early 2000s. Despite the increased presence of state regulation in the resource sector, resource nationalism has not been incompatible with foreign investment. This article contributes to better understand resource nationalist policies that emerged in recent years and offers new theoretical insights to explain state-IOC relations by integrating obsolescing bargaining theories and constructivist approaches. Drawing on the case of Venezuela, this article explains how the Chávez regime pursued a hybrid model of control and welcoming of investments in the oil sector. The article argues that both bargaining insights and ideational considerations are important in explaining this model. In the context of high oil prices and sunk investments, it is unsurprising that a leftist government would seek to renegotiate contracts to seek better deals from extractive companies. Yet, focusing exclusively on those incentives misses important ideational drivers for the government to keep investors in the country. For Chávez's government, effecting changes in the oil policy was possible after waging an intense battle with its NOC, PDVSA, over control. Association with foreign investment became crucial to build its socialist model and to control its own company.

Pemex business plan draws scepticism in Mexico

2019 ◽  
Keyword(s):  
Federal Government ◽  
Oil Prices ◽  
Business Plan ◽  
Content Type ◽  
Public Finances ◽  
Rating Agencies ◽  
Insurmountable Obstacle ◽  
Oil Sector ◽  
The Government ◽  
Substantial Drop

Significance It has proven a disappointment, failing to explain how ambitious targets will be met, while confirming the reversal of the oil sector liberalisation enacted by the Pena Nieto administration, which had been showing some promising results. Impacts The government cannot mount a massive rescue of Pemex without endangering its own finances. Any substantial drop in global oil prices could present an insurmountable obstacle for Pemex, and a significant blow to public finances. A downgrade of Pemex’s debt could push rating agencies to do the same with the bonds of the federal government.

Oil prices will increase Ecuador's fiscal pressures

2015 ◽  
Keyword(s):  
Monetary Policy ◽  
Budget Deficit ◽  
Oil Prices ◽  
Content Type ◽  
Full Control ◽  
Public Resources ◽  
Oil Sector ◽  
The Government ◽  
The Impact ◽  
Impact Of Falling

Significance The collapse of world oil prices has brought fiscal policy sharply into focus in Ecuador. At a time when the budget deficit is widening and the opposition is strengthening, the government faces the prospect of receiving significantly less income from the oil sector than anticipated. The fallout from the plunge of oil prices coincides with the beginning of the constitutional debate that could allow the re-election of President Rafael Correa in 2017. Impacts The government will intensify efforts to raise oil output in a bid to ease the impact of falling oil prices. Conflicts between central and local government will probably increase as public resources become scarcer. If oil prices remain low, the appeal of exiting dollarisation and establishing full control over monetary policy will rise.

Ecuadorian government seeks to boost oil activity

2015 ◽  
Keyword(s):  
Primary Source ◽  
Oil Prices ◽  
World Market ◽  
Balance Of Payments ◽  
Oil Fields ◽  
Content Type ◽  
Oil Companies ◽  
Oil Sector ◽  
The Government ◽  
Total Oil

Subject The outlook for the oil sector. Significance While Ecuador is the smallest member of OPEC, oil is its largest export and the government's primary source of revenue. The collapse of world oil prices has forced the government to introduce import controls to support the balance of payments and cut public spending to reduce the budget deficit. However, rising levels of oil production have softened the blow of falling oil prices. The government hopes to continue this trend by attracting new investment into the oil sector, despite the downturn in the world market. Impacts The perilous state of the balance of payments and public finances will increase the need to attract new foreign investment into oil. Chinese oil companies are likely to increase their presence in Ecuador, reflecting trends elsewhere in Latin America. Development of the oil fields previously integrated into Yasuni/ITT should increase total oil output significantly from 2018-19.

Venezuela's oil sector faces rising challenges

2017 ◽  
Keyword(s):  
Default Risk ◽  
Oil Prices ◽  
Content Type ◽  
Oil Demand ◽  
Heavy Crude ◽  
Oil Sector ◽  
The Government

Subject Venezuela's beleaguered oil sector. Significance With an economy dominated by oil, the collapse in oil prices during 2016 hurt Venezuela severely, already struggling with output and investment. This year brings a range of oil-related challenges, starting with the uncertain prospects for crude prices, balanced between the fragile OPEC-led production cuts and a hoped-for increase in global oil demand during the year. Impacts Low prices and production could raise the default risk for both PDVSA and the government. Despite huge reserves, higher-cost extra-heavy crude is not an attractive investment if low prices persist. Debts to China will further reduce the volume of oil available for sale, limiting revenue and prospects for boosting output.

Rising oil prices will bolster Ecuador’s Moreno

2018 ◽  
Keyword(s):  
Oil Prices ◽  
Political Crisis ◽  
Environmental Discourse ◽  
Content Type ◽  
Yasuni National Park ◽  
Fiscal Conditions ◽  
Oil Sector ◽  
International Investors ◽  
The Government ◽  
Oil Revenues

Significance Higher oil prices have eased pressures on Ecuador’s trade balance and public finances, helping President Lenin Moreno as he attempts to ameliorate the political crisis that has gripped his government since his inauguration in May. However, the oil sector faces challenges including tight fiscal conditions, production cuts and widespread corruption. Impacts Higher oil prices will reassure international investors that the government will be able to honour its rising debt obligations. Moreno is likely to secure referendum backing for his plans to increase the protection of the Yasuni National Park. Moreno will find it difficult to reconcile his environmental discourse with his need to bring in fresh oil revenues over the longer term.

Iraqi Kurdistan could see oil and gas advances

2021 ◽  
Keyword(s):  
Oil And Gas ◽  
Oil Prices ◽  
Oil Production ◽  
Content Type ◽  
Oil Companies ◽  
Iraqi Kurdistan ◽  
Oil Sector ◽  
The Government ◽  
Slight Rise

Significance The oil sector managed a slight rise in oil production in 2020, despite the challenges of the pandemic and low oil prices. The KRG mostly managed to keep up payments to oil companies but did not assist Baghdad in making production cuts under the OPEC+ agreement. Impacts Combined new gas projects could meet domestic needs and potentially allow exports by the later 2020s. The government could resume payments of overdue amounts to international oil companies from this month. Talks with Baghdad will become more complex around planned elections in October 2021 and depending on legal developments with Turkey.

THE ROLE OF INTERNATIONAL OIL COMPANIES IN THE CREATION OF NEW CENTERS OF WORLD OIL PRODUCTION (ON THE EXAMPLE OF BRAZIL)

2020 ◽  
pp. 72-86
Author(s):  
Ivan A. Kopytin ◽  
◽  
Maksim V. Kramskoi ◽  
Keyword(s):  
Foreign Investment ◽  
Foreign Capital ◽  
Time Lag ◽  
Oil Production ◽  
Business Climate ◽  
Oil Companies ◽  
Brazilian Government ◽  
Oil Sector ◽  
The Government ◽  
Oil Company

Emergence of Brazil as a large oil exporter in the last years has become a significant development in the world oil market. The article focuses on the role played by foreign capital in development of the Brazil oil sector in the long historical perspective. The analysis led to the following conclusions. First, every time when Brazilian government was opened the oil industry for foreign investment, oil production went up with some time lag. Second, opening of the oil sector to foreign competition positively impacts the national oil company Petrobras, which plays a central role in the realization of the Brazilian government oil policy. Access to foreign investment and technology as well as competitive pressure increases the efficiency of the national oil company. Third, for decades terms of doing business for foreign companies in the Brazilian oil sector periodically changed depending on the situation in national economy. During periods of high economic dynamism Brazil introduced restrictions on activities of foreign oil companies, while with the deterioration of economic situation and aggravation in macroeconomic imbalances the government on the contrary opted for liberalization of foreign capital activity in oil production. It is concluded that in the last five – seven years the involvement of international vertically integrated oil companies in the Brazilian oil sector reached such a scale that any new attempt to complicate and impair business climate for foreign investors could result in not only economic but also political collusions.

Morocco challenges Algeria’s Gulf neutrality policies

2018 ◽  
Keyword(s):  
Foreign Policy ◽  
United Arab Emirates ◽  
Foreign Investment ◽  
Oil Prices ◽  
Business Environment ◽  
Steel Plant ◽  
Eastern Region ◽  
International Arbitration ◽  
Content Type ◽  
The Government

Subject Algeria's policy towards the Gulf. Significance The Algerian government in April concluded an agreement with a United Arab Emirates (UAE) company to invest in a steel plant in the eastern region of Annaba. The announcement of the deal comes amid friction with the UAE arising from the perception that Algeria is cultivating excessively friendly relations with Qatar, thereby taking sides in the bitter rivalry among Gulf Arab states that emerged in June 2017. Impacts Algeria will maintain its principle of non-interference and keep a low-key foreign policy. The government is looking to attract foreign investment generally as a result of low oil prices that have shrunk Algeria's revenues. The country’s restrictive business environment could see investors resort to international arbitration.

South Sudan oil sector expansion will prove elusive

2017 ◽  
Keyword(s):  
Oil Prices ◽  
Income Source ◽  
Content Type ◽  
Technical Issues ◽  
Oil Sector ◽  
The Government ◽  
Oil Revenues ◽  
Budget Shortfalls ◽  
Domestic Fuel ◽  
Budget Revenue

Significance Since independence in 2011 -- and during the preceding six years of autonomy -- the budget has depended overwhelmingly on oil revenues. However, production has contracted significantly since the outbreak of conflict in 2013, and revenues have suffered further from declining global oil prices. With savings and credit almost entirely depleted, the government needs new revenue to fund budget shortfalls, and is looking to the only reliable income source it has known. Impacts Logistics, equipment and technical issues will further complicate efforts to boost production. Plans to build a domestic refinery could ease domestic fuel shortages, but may face delays. Budget revenue targets will be missed, putting pressure on expenditure requirements.

Funding questions shadow Nigeria's new economic path

2015 ◽  
Keyword(s):  
Public Investment ◽  
Oil Prices ◽  
Economic Policies ◽  
Medium Term ◽  
Single Digit ◽  
Content Type ◽  
Oil Sector ◽  
The Government ◽  
Debt Levels

Subject The incoming administration's economic promises. Significance Investor and popular confidence in the incoming Muhammadu Buhari administration are high. The new president's perceived incorruptibility is seen as the antidote to President Goodluck Jonathan's ineffectiveness. However, a lack of clarity over how the All Progressives Congress (APC) can fund its economic policies remains a source of uncertainty, compounded by low oil prices. Impacts Nigeria's debt levels are relatively low, although the government may be forced to dramatically increase borrowing. However, the sharp devaluation of the currency will complicate the CBN's goal of maintaining single-digit inflation over the medium term. Slowing non-oil sector growth reflects the depreciation of the oil-linked naira and curbed public investment.

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