There are two countries that within the past week have nationalized energy resources on behalf of the needs of the people. Historically – certain leftist socialist countries tended to own 100% of their resources of all industries. And some countries can do this successfully if they have well educated citizens with the necessary backgrounds in engineering, math and science. This provides a great deal of benefit to consumers by taking out the profit motive. There have been numerous times that this has failed as well; a country managing it’s own resources does not necessarily lead to prosperity.
A more modern solution to this problem has been a private-public partnership where private investors have a fairly stable investment return and government maintains low prices for it’s citizens and a majority interest to the claim of it’s resources. There appears to be a growing desire among the masses to support government action to nationalize public resources for the benefit of the people. Historically – this would have caused retaliation in the form of attempted coup d’etats (Venezuela 2002 – source) or successful coup d’etats (Iran, Guatemala, Argentina, Bolivia – the list goes on and on). Whether or not countries will retaliate on behalf of corporate interests for this flood of nationalization that exists or will exist has yet to be seen.
Argentina is taking over the country’s largest oil company – Spanish based YPF. The Washington Post has the story HERE:
Only two months earlier, Repsol YPF had upped its estimate for the shale oil and gas it found in Argentina to nearly 23 billion barrels, enough to double the country’s output in a decade. But the Spanish company said it would cost $25 billion a year to develop, and warned that Argentina would need to overhaul its energy policy to attract the necessary investment.
Instead, Fernandez simply seized the company, giving her government access to billions of dollars’ worth of cash, enough energy to answer domestic demand in the short term, and potentially even solving Argentina’s chronic money woes in the future.
She accused Repsol of draining YPF since gaining control in the 1990s, underinvesting in its oil and gas fields and failing to keep pace with the needs of Argentina’s growing economy even as it paid huge dividends to shareholders.
NPR has more on Argentina HERE:
Spanish officials are threatening to retaliate against Argentina for seizing a majority of shares in the biggest oil company in Argentina, YPF.
The Argentine plan calls for the state to take 51 percent of the company, all of it coming out of the 57 percent that is now owned by Repsol of Spain. Other shareholders in the company would be untouched.
Argentina says it will compensate Repsol for the shares, but the amount will be determined by an Argentine panel.
Repsol officials say their stake in the company is worth at least $10.5 billion. The company’s shares have tumbled this week after Fernandez announced her plan. Argentina’s Senate plans to vote on the move next week, and there appears to be overwhelming support for nationalization.
Bolivia is nationalizing it’s electrical grid…much to the anger of Spanish based company TDE. Reuters has the story:
Bolivia’s leftist President Evo Morales marked May Day o n T uesday by nationalizing the local unit of Spain’s Red Electrica, ratcheting up tension between the former colonial power and South American governments eager to assert control over energy resources.
Morales ordered the army to take over the Cochabamba headquarters of the power transmission company known as TDE.
TDE administers 1,900 kilometers of power lines in Bolivia. Red Electrica indirectly holds 99.9 percent of the company, which reported net profits of 12.5 million euros last year, accounting for less than 3 percent of Red Electrica’s 2011 net profits.
Red Electrica officials were not immediately available for comment, but a Spanish government source in Madrid said authorities were in touch with La Paz to discuss technical and diplomatic aspects of the nationalization.
Ecuador nationalized much of the oil industry in 2010 - source.
Venezuela has nationalized many various industries including oil, steel and housing developments - source.
Petrobras is a huge oil company with Brazil as the majority shareholder – source.
There is a movement to nationalize the copper industry in Chile – source.
