Indeed, it is often eclipsed by mexicos oil nationalization one year later in 1938. May 12, 2006 bolivias nationalization of oil and gas. Nationalization of oil supplies was achieved in 1976. Before nationalization, the oilrich countries looked much like the rest of the world. President cristina kirchner said she will nationalize argentinas largest oilandgas company, ypf. At the same time, in the 1960s venezuela implemented a policy of no more concessions which was the beginning of the nationalization of the oil industry. In 1992, 1993, and 1997, hoping to expand oil production through foreign investment, pdvsa auctioned the rights to thirtythree oil fields, entering in agreements with several of the worlds top oil companies during a time now called the.
Compiled by authors from grosse 1976, blaiser 1985, sigmund 1980 and others. Argentina, though only a small producer, nationalized its oil production in 1907 before privatizing the staterun oil company in 1993. Review of international political economy table 1 oil and gas nationalizations county year of nationalization argentina 1922, 1924, 1930, 20041 bolivia 1937, 1969, 2006 brazil 1953. Nationalization has accompanied the implementation of communist or socialist theories of government, as was the case in the transfer of industrial, banking, and insurance enterprises to the state in russia after 1918, the nationalization of the oil industries in mexico in 1938 and in iran in 1951, and the nationalization of foreign businesses. Ypf the argentine oil nationalization of 2012 case solution. The nationalizations, which affect oil production in the orinoco oil belt, will take effect on may 1st of this year, until which time companies may negotiate the terms of.
This paper critically analyses the decision to nationalize oil companies in argentina. However, a host of political and regulatory risks, as well. Mar 28, 2017 the field of political risk assessment has been in existence for roughly 40 years, and i was a practitioner in the international oil and gas industry for 30 of those, from 1983 to 20. Bolivias nationalization of oil and gas council on foreign. Renationalization of ypf under international law term paper. They run logit pooled regressions of nationalization events on oil price shocks, quality of government institutions, and a vector of controls comprising human capital, oil wealth, region dummies, gdp, and population. Hfw argentinas nationalisation actions causes a stir in oil markets. Argentinas nationalisation actions causes a stir in oil markets since the argentine governments announcement on 16 april 2012. Powerful cemex and banco santander are the latest victims on a growing list of companies whose subsidiaries are being nationalized in some countries of latin america. From privatization to renationalization 327 as a result of massive popular mobilization, which included consum er protests was expressed by the duhalde and mainly kirchner presidencies. Analyzing petroleum product supply at the country level. Argentinas decision to take control of the countrys largest oil company ypf has created a schism in the international communitywith winners and losers falling into place along the divide. Chevron and others dont fear nationalization agustino fontevecchia contributor opinions expressed by forbes contributors are their own. Fernandezs government has complained that ypf underinvested in argentina and has sent too much oil, and profits, abroad.
The state would purchase a 51% share, with the national government controlling 51% of this package and ten provincial governments receiving the remaining 49%. The mountainous border region shared by argentina, bolivia and chile dubbed the south american lithium triangle holds some of the worlds largest reserves of lithium, making it poised to rise in importance as the demand for the globes new oil increases in the years to come. Jun 15, 2018 the mountainous border region shared by argentina, bolivia and chile dubbed the south american lithium triangle holds some of the worlds largest reserves of lithium, making it poised to rise in importance as the demand for the globes new oil increases in the years to come. Review of international political economy explaining. As a reuters dispatch dated 16th april further explains, repsol made the disastrousdecision of merging with ypf in 1999 because in 20012 argentina fell into fullscale financial collapse. Governments in argentina, bolivia, ecuador and venezuela have all embarked on nationalization exercises in the past decade to varying degrees of success.
Pdf mining nationalization and privatization in peru and. Also during this time, foreign ownership increased to the point that almost all of the productive oil land in mexico was owned by foreigners. Ypf the argentine oil nationalization of 2012 by noel maurer, gustavo a. The spanish oil company, repsol, which had its assets in argentina seized in april, takes its case to the world banks arbitration body in washington. Ignoring critics, argentina to nationalize oil firm the oil company is the largest in argentina, and is owned mostly by a private spanish company. Ypf, argentinas largest oil company, was privatized in 1993 and purchased at the time by spains repsol which up until this latest move owned 57. Following the nationalizations approval in the lower house, parliament member agustin rossi remarked, starting today in argentina, oil ceases to be a commodity for ypf. The nationalization process of mining companies was a global issue from the beginning of the twentieth century. Ross traces the oil curse to the upheaval of the 1970s, when oil prices soared and governments across the developing world seized control of their countries oil industries. A further indicator of the impending nationalization of the oil and gas industry was an announcement from the government of chubut. In april 2012, the argentine state nationalized the yacimientos petroliferos fiscales s. Major oil companies operating in venezuela have had difficulty with the spreading resource nationalism.
Repsols ceo to travel to argentina amid ypf rumors of nationalization. Ypf the argentine oil nationalization of 2012 case. The oil shocks of the age were decisive in lending strength to the treatment. The presence of oil was known in venezuela even before the discovery of the americas in 1492. In january 1, 1976, president carlos andres perez signed the law that reserved the government the industry and the commerce of hydrocarbons in venezuela. Robert bates, harvard university this is the single most important book on the resource curse to date. Download file to see previous pages on the other hand, argentina believes that they have enough authorities and freedom to formulate policies which are necessary to safeguard the interests of the country. The oil curse is essential reading for scholars and those engaged in public debates. Nationalization refers to the process of a government taking control of a company or industry, which generally occurs without compensation. The large profit increases that the oil companies would see in 1973, would lead to more disagreements, and raise participation to 100% basically nationalization by the end of 1973. They used them for medicinal and illumination purposes. Apr 17, 2012 president kirchners plan to nationalize the spanishcontrolled oil company, ypf, is raising fears of more expropriations of privately run companies and has set off a furor in spain. Ypfs interests include rights to the valuable vaca muerta shale gas discovery. For this purpose, and pursuant to the nationalization law, pdvsa was created by presidential decree n 1123 of august 30, 1975.
A similar deal was struck with ecuador where venezuela agreed to refine 100,000 barrels 16,000 m 3 of crude oil from ecuador at discount prices. President kirchners plan to nationalize the spanishcontrolled oil company, ypf, is raising fears of more expropriations of privately run companies and has set off a furor in spain. It turns out spain and argentina have signed a bilateral investment treaty. In april 2012, argentina announced the nationalization of most of repsol ypf s. Oil company nationalization in perhaps her most controversial move of the year, this april kirchner nationalized ypf, argentinas biggest oil company, by emergency decree from spanish energy. It first occurred in europe for diverse reasons and at the end of the 1940s, it. After decades of high investment, in the 1960s and 1970s oil taxation of the iocs international oil companies was significantly increased and oil concessions were not renewed. Ignoring critics, argentina to nationalize oil firm. Lawmakers celebrate at the end of a debate in the argentine congress over the nationalization of argentina s biggest oil company ypf in buenos aires may 3, 2012. Ypf the argentine oil nationalization of 2012 case solution, by christmas maurer, gustavo a. This, in part, is due to mexican oils greater significance for the u. Argentinas traditional swings of the politicaleconomic pendulum. Oct 03, 2012 oil company nationalization in perhaps her most controversial move of the year, this april kirchner nationalized ypf, argentinas biggest oil company, by emergency decree from spanish energy. Background bolivia 1937 mexico 1938 expropriation and nationalization of the petroleum industry the mexican government has a monopoly in the exploration, production, refining, and distribution of oil and natural gas, and in the manufacture and sale of basic petrochemicals constitutional.
Article 27 of the 1917 constitution said that any oil or energy related substances. In 1997, ypf accounted for 42% of argentinas oil and 35% gas supply. Two prominent examples are the nationalization of the suez canal in 1956 by president egyptian nasser and the nationalization of all international oil companies in 1938 by the mexican president lazaro cardenas. Argentina is one of latin americas largest and wealthiest countries, possessing abundant human and natural resources, highlydiversified industries, and a 43 million person market. Progovernment supporters cheer during a debate in the argentine congress over the nationalization of argentinas biggest oil company ypf in buenos aires may 3, 2012. Argentinas government suspended its oil plus and refining plus programs.
Oil nationalization and currency controls divide a. Indeed, during this period, argentina began importing gas for the time in 20 years. International politics is always a risk for oil companies. Yet, bolivias oil nationalization still has not received the attention it deserves. Argentina is estimated to have the worlds second largest shale gas resources and fourth largest shale oil resources in the world. On january 10, 2019, maduro took office for a second term after winning an election in may 2018 that was deemed illegitimate within venezuela and by the united states and more than 50 other countries. The bill was overwhelmingly approved by both houses of congress, and. Nationalization is a very pertinent topic to discuss at the moment because with the price of oil increasing steadily since its collapse in 1998, oil is becoming a more expensive commodity and the organizational structure of that industry will affect how it is extracted and distributed. Nationalization of the oil industry in mexico the mexican oil industry continued to expand through 1921. Is argentinas nationalization of ypf from the spanish oil. The move fired up a battle with the companys spanish. Pdf mining nationalization and privatization in peru and in.
Caracas, february 27, 2007 venezuelas president chavez announced a new lawdecree, which will nationalize the last remaining oil production sites that are under foreign company control. The impending nationalization of argentinas oil and gas. Hong zhu, shiyan lou, in development and reform of higher education in china, 2011. The national oil administration was conceived as a group of owned state companies with technical autonomy in the execution of oil operationbut under the total control s of the national government. From privatization to re nationalization 327 as a result of massive popular mobilization, which included consum er protests was expressed by the duhalde and mainly kirchner presidencies. Policy making in the oil sector can be highly politicized. The nationalization of oil supplies refers to the process of confiscation of oil production operations and private property, generally in the purpose of obtaining more revenue from oil for oil producing countries governments. The oil curse addresses a timely, policyrelevant issue in a way that nonacademics and academic specialists alike can.
Why cashing in on lithium in south america wont be easy. Oil is now a basic resource for economic growth and the development of the country. Latin american energy dialogue, white papers and reports. Oil and nationalism in argentina reduces your potential stress. To privatize or to nationalize that is the question. In 2007, chavez struck a deal with brazilian oil company petrobras to build an oil refinery in northeastern brazil where crude oil will be sent from both brazil and argentina. Venezuela is one of the worlds largest exporters of oil and has the worlds largest proven oil reserves at an estimated 296. Argentinian president moves to nationalise spanishowned. This docwneot bas been prepared as pan of the oil and gas division effort to disseminate. Management of the oil and gas industries in argentina has been historically characterized by political. After the nationalization, pdvsa privately undertook all oil activities in venezuela until 1992.
Yet, recently, mexico has signaled that it hopes to liberalize its energy industry in a substantial way for the first time since pemex, the state oil company, became a. Chinas heis had been stateowned or governmentowned since the nationalization of private universities in 1950s till the establishment of the first private hei in 1980, although the administration of heis changed from sole direct management of the central government to. Argentinas move to seize the local energy assets from spanish oil and gas giant repsol has spurred condemnation from the european unions parliament and has led to worries about more antifree. Oil company nationalization in perhaps her most controversial move of the year, this april kirchner nationalized ypf, argentina s biggest oil company, by emergency decree from spanish energy. Venezuela will nationalize a fleet of oil rigs belonging to u. Since oil was discovered in argentina in 1907 until the privati. Argentina sent shock waves through the oil industry by announcing plans to nationalise local oil assets controlled by a spanish company, in a controversial move that threatens to sour the already. The oil producing nations that were once being exploited by the wealthy oil companies were now firmly in control. County year of nationalization argentina 1922, 1924, 1930, 20041 bolivia 1937, 1969, 2006 brazil 1953 chile 1932, 1950 colombia 1951 ecuador 1972, 1974, 2006 mexico 1938 peru 1968, 1986 uruguay2 1931 venezuela 1976, 2001 source. This process, which should not be confused with restrictions on crude oil exports, represents a significant turning point in the development of oil policy.
I beginnings of the oil industry in the middle east and. Mar 30, 2018 nationalization refers to the process of a government taking control of a company or industry, which generally occurs without compensation for the loss of the net worth of seized assets and. Indonesias policy of bringing key natural resources under domestic control has heightened investor concern in that sector. In 2050, a 100% renewable energy matrix would cost 91% less than perpetuating the current one, aida vila.
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