| The increase of state-controlled resources is ulitmately | | | | national gas monopoly Gazprom. And in 2006, Royal |
| bad news for American consumers, says Irwin | | | | Dutch Shell was forced to sell a 50%-plus-one-share |
| Greenstein, writing for Contrarian Profits. Not only are | | | | stake in the Sakhalin-2 oil field to Gazprom. |
| state-run resource companies inefficient compared to | | | | A consortium including ExxonMobil, Total, Shell and |
| private sector firms but also many of them are hostile | | | | ConocoPhillips has already invested $17 billion in |
| to US interests. | | | | developing the Kashagan Field in Kazakhstan. But over |
| Last week, Russia and Venezuela finalized their deal | | | | the past two years, Kazakhstan has escalated its |
| to bolster cooperation in the oil and gas markets. | | | | demands, forcing these international oil companies to |
| Russia’s state gas monopoly OAO Gazprom and | | | | reduce their stake in order to give state-owned KMG |
| Venezuela’s Petroleos de Venezuela SA have | | | | a larger share. |
| inked a memorandum of understanding that allows for | | | | This trend is bad news for US consumers. Since most |
| greater cooperation between the companies. | | | | of these regimes are openly anti-American, they could |
| To help seal the deal, Russia is granting Venezuela a | | | | push up the price of gas at the pump. |
| $1 billion credit for the purchase of Russian weaponry. | | | | And politics aside, the management of energy facilities |
| After all, you never know if ExxonMobil (NYSE:XOM) | | | | by these state-owned agencies is downright inefficient |
| and ConocoPhillips (NYSE:COP) will get the Bush | | | | compared with the more experienced Western |
| administration to invade in an effort to take back their | | | | companies - in turn achieving the same effect as |
| investments in Venezuela. | | | | political price gouging. |
| And it could get worse for American companies as | | | | As The Economist explains, most national |
| they inadvertently build out energy infrastructures that | | | | appropriations took place in the 1970s, when oil hit |
| are appropriated by emerging nations that have | | | | historically high levels. Once the oil price came down in |
| petro-fascists sitting on the throne. | | | | the 1980s and 1990s, the move to nationalize |
| A recent article in The Economist questioned whether | | | | “virtually disappeared and re-emerged only in the |
| high oil prices will stimulate “resource nationalism.” | | | | last decade when oil prices climbed back to 1970s’ |
| In addition to Venezuela’s seizure, Bolivia and | | | | levels.” |
| Ecuador forced international companies to make | | | | We can only expect this trend to continue unless there |
| similar concessions. | | | | is a collapse of oil prices. In the mean time, we find that |
| At about the same time, TNK-BP, a Russian subsidiary | | | | the US oil companies find themselves as accidental |
| of BP, had to sell a major stake in its oil business to the | | | | Communists. |