SEARCH BLOG: OIL and NATURAL GAS and VENEZUELA
From Seeking Alpha:
Since writing my article Argentina on the Brink: What is the Real Investment Risk?, events in Argentina over the last week have moved even more rapidly towards what I believe is the impending nationalization of the Argentine oil and gas industry. These events also indicate that the Argentine government is targeting foreign companies not only operating in the oil and gas sector but across the Argentine business sector. These recent events have escalated the degree of investment risk for foreign investors who hold investments in Argentine companies or foreign companies operating in Argentina. It has also significantly increased the risk for non-Argentine companies operating in the oil and gas sector, because I believe that these companies will eventually lose their oil and gas concessions.In case you forgot what happened in Venezuela:
Venezuela Decrees Nationalization of Last Foreign Controlled Oil Fields
By Caracas, February 27, 2007 (venezuelanalysis.com)— Venezuela’s President Chavez announced a new law-decree, which will nationalize the last remaining oil production sites that are under foreign company control. 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 the nationalization.
Venezuela’s economic freedom score is 38.1, making its economy the 174th freest in the 2012 Index. Its score increased by 0.5 point since last year, with a modest gain in labor freedom partly offset by a drop in trade freedom. Venezuela is ranked 28th out of 29 countries in the South and Central America/Caribbean region, and its overall score is much lower than the world average.
Venezuela continues to be mired in a climate of economic repression. Severely hampered by state interference, the formal economy is increasingly stagnant, and informal economic activity is expanding. Monetary stability is particularly weak, and there are extensive price controls on almost all goods and services. Government interference in the financial sector further distorts price levels and constrains private-sector growth by allocating credit on non-market terms. [source]