Nationalization of oil supplies

The nationalization of oil supplies refers to the process of deprivatization of oil production operations, generally in the purpose of obtaining more revenue from oil; it should not be confused with restrictions on crude oil exports.

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. As a result of not having access to countries amenable to oil exploration, ExxonMobil is not making nearly the investment in finding new oil that it did in 1981.

Latin America

Enrique Mosconi, the director of the Argentine state owned oil company Yacimientos Petrolíferos Fiscales (YPF, the first state owned oil company in the world), advocated oil nationalization in the late 1920s among Latin American countries.

Mexico

Main article: Mexican oil expropriation

Mexico nationalized its oil industry in 1938, and has never privatized, restricting foreign investment. Since the giant Cantarell field in Mexico is now in decline, the state oil company Pemex has faced intense political opposition to opening up the country's oil and gas sector to foreign participation. Some feel that the state oil company Pemex does not have the capacity to develop deep water assets by itself, but needs to do so if it is to stem the decline in the country's crude production.

Venezuela

Major oil companies operating in Venezuela have had difficulty with the spreading resource nationalism. Exxon Mobil and ConocoPhilips have said they would walk away from their large investment in the Orinoco heavy-oil belt rather than accept tough new contract terms which raise taxes and oblige all foreign companies to accept minority shares in joint ventures with the state oil company, Petróleos de Venezuela (PDVSA).

Iran

Iran, now among the world's leading crude-oil exporters, could become a net importer of oil within the next decade due to rising demand and slow-growing production. Possessing the world's second-biggest proven reserves of oil, it infuriated its people when the government brought in petrol rationing on two hours notice. Due to limited refinery capacity, it has discouraged gasoline usage. Shortly after the petrol/gasoline rationing, which has reduced demand in some areas by 20%-30%, it announced it will not be producing cars powered only by gasoline.

Russia

In Russia, Vladimir Putin's government has pressured Royal Dutch Shell to hand over control of one major project on Sakhalin Island, to Russia's Gazprom in December. The founder of formerly private Yukos has also been jailed, and the company absorbed by state-owned Rosneft. Such moves strain the confidence of international oil companies in forming partnerships with Russia.

See also

• Energy security
• Energy security and renewable technology
• Petroleum
• Peak oil
• U.S. Energy Independence