Nationalization Of Oil Supplies
The nationalisation of oil supplies refers to the process of deprivatization of oil production operations, generally in the purpose of obtaining more revenue from oil for oil producing countries. This process, which should not be confused with restrictions on crude oil exports, represents a significant turning point in the development of oil policy. Nationalization eliminates the concession system—in which private international companies control oil resources within oil-producing countries—and allows oil-producing countries to regain control. Once these countries become the sole owners of their resources, they have to decide how to maximize the net present value of their known stock of oil in the ground. Several key implications can be observed as a result of oil nationalization. On the home front, national oil companies are often torn between national expectations that they should carry the flag and their own ambitions for commercial success, which might mean a degree of emancipation from the confines of a national agenda.
According to consulting firm PFC Energy, only 7% of the world's estimated oil and gas reserves are in countries that allow private international companies free rein. Fully 65% are in the hands of state-owned companies such as Saudi Aramco, with the rest in countries such as Russia and Venezuela, where access by Western companies is difficult. The PFC study implies political factors are limiting capacity increases in Mexico, Venezuela, Iran, Iraq, Kuwait and Russia. Saudi Arabia is also limiting capacity expansion, but because of a self-imposed cap, unlike the other countries.
Read more about Nationalization Of Oil Supplies: History, See Also
Famous quotes containing the words oil and/or supplies:
“I bade, because the wick and oil are spent
And frozen are the channels of the blood....”
—William Butler Yeats (1865–1939)
“There were three classes of inhabitants who either frequent or inhabit the country which we had now entered: first, the loggers, who, for a part of the year, the winter and spring, are far the most numerous, but in the summer, except for a few explorers for timber, completely desert it; second, the few settlers I have named, the only permanent inhabitants, who live on the verge of it, and help raise supplies for the former; third, the hunters, mostly Indians, who range over it in their season.”
—Henry David Thoreau (1817–1862)