Resource Management in Latin America, 2000-2005
Recent years have brought important changes to the oil sector in several Latin American producing countries. Though regional reports have suggested a move toward tighter state control over the industry, under scrutiny, the region in fact reveals a much more diverse environment of trends and practices.
Some countries have relied on state-owned monopolies or a mix of public and private companies, and others have consigned the oil sector to private enterprise and the free market.
Originally published in Spanish in 2007, this survey by economist Humberto Campodonico offers detailed insights into the approaches to oil sector management in eight Latin American countries between 2000 and 2005. The analysis of this period is crucial to understanding the recent transformation of the regional environment for petroleum operations.
The Millennium commodities boom drove a climate of ongoing change, and RWI recognizes that some of the report’s conclusions are now outdated. Bolivia nationalized its oil industry in May 2006, for instance, and Venezuela had shifted international oil companies into a service provider role by late 2007. Colombia deepened its market approach through an initial public offering of its national oil company, but lost its monopoly over the oil market.
The report assesses each country’s performance against a common set of questions: What legal changes to the upstream sector were enacted in recent years? What changes, if any, resulted in investment flows to the upstream sector? How have financial indicators for national oil companies (NOCs) and other state-owned oil been affected? And, how have governments benefited from revenue generated by petroleum exploration and production? Although the report does not offer cross-comparisons, it provides valuable information for anyone seeking to understand the choices each country has made as it develops its oil reserves.
The picture emerging from this survey is of a region sampling different policies to develop its resource base, and where countries are not averse to midstream adjustments if they appear to be in the national interest.
Though more recent changes alter the country-specific circumstances in many cases, Revenue Watch is releasing this report contribute to the wider discussion of these policies in Latin America, and to provide sound information as a basis for ongoing dialogue on how to turn mineral resources into sustainable development. The end of the remarkably long cycle of high oil prices is bound to bring further changes to the region.
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- Toward sustainable, fair and equitable globalization (Español, CEPAL-GTZ)