May 17, 2006

More fun in South America

This time it's Ecuador -- from Yahoo/Reuters:
Ecuador moves against US oil giant
Ecuador began on Tuesday to take over operations of U.S. oil giant Occidental Petroleum Corp, the latest move in Latin America against foreign energy producers after nationalization in Bolivia and growing state intervention in Venezuela.

Ecuador revoked Occidental's contract on Monday after accusing it of transferring part of an oil field without authorization. Occidental says it has complied with its obligations and still hopes to settle.

Occidental share prices fell by 2.35 percent on Tuesday as company executives held talks with Ecuadorean energy officials, who were escorted by police into the company's Quito headquarters.
A bit more:
The surprise contract cancellation came a little more than two weeks after leftist President Evo Morales of Bolivia, the country's first indigenous president nationalized the industry and ordered the military to occupy natural gas fields.

Bolivia's move sparked Wall Street fears that leftist Venezuelan President Hugo Chavez, a self-styled revolutionary famous for his anti-U.S. rhetoric, was pushing his neighbors in a campaign to tighten state control over natural resources.
They may see an initial monetary gain by removing the company that developed the oil fields and built the infrastructure but when that equipment starts breaking down, when they start needing replacement parts... As they said in the movie Ghostbusters: "Who 'ya gonna call" The beginning of a very slippery slope. Posted by DaveH at May 17, 2006 9:08 PM
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