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Calgary Herald: U.S. takes nations to task over oil dealings

Thursday, 15 February 2007

A drive by big oil-producing nations like Venezuela to renegotiate deals with international companies has already hurt global crude production, a trend that could worsen if foreign investment declines further.

In nations like Ecuador, Bolivia and major exporter Russia, soaring energy prices have emboldened governments to take a hard line on production contracts, many of which were struck in the 1990s when oil prices were below $20 a barrel.

That’s a far cry from the highs near $80 a barrel set last year that left billions of dollars of export revenue on the table for leaders like firebrand Venezuela President Hugo Chavez, who relies heavily on the country’s state-owned oil company to finance his leftwing social agenda.

Without naming them outright, U.S. Energy Secretary Sam Bodman Wednesday took to task leaders like Chavez, and said risk of supply disruptions to the U.S. economy is “unacceptable.”

“Moves to restrict foreign investment and increase the reach of state-run energy industries limit access to capital and to the expertise needed to unlock new resources,” Bodman told a high-profile U.S. oil conference hosted by Cambridge Energy Research Associates.

Some of the world’s top oil companies, including Exxon Mobil Corp., Chevron Corp., ConocoPhillips, Statoil and BP Plc, are facing a May 1 deadline to renegotiate deals in Venezuela’s Orinoco oil region or have their multibillion-dollar projects seized.

In Russia, the Kremlin is also seeking ever-tighter control over its strategic oil and gas reserves where foreign investors like Exxon Mobil and Royal Dutch Shell already have only limited involvement.

“(Nationalism is) certainly having an impact on supply growth potential,” said Ed Morse, chief energy economist at Lehman Brothers in New York.

Some experts warn that the current path chosen by Chavez and others could have severe negative long-term consequences, not just for oil production, but for the countries. and its sister websites,,,,, and are all owned by John Donovan. There is also a Wikipedia article.

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