Ecuador moves against US oil giant

May 17th, 2006 at 20:56 Björn Hallberg

Occidental Petroleum Corp just got busted by Ecuador. U.S. is “disappointed” … awwwwww, are we supposed to feel sorry for you?

Though for the record it is not at all clear that Ecuador is moving to nationalize all oil operations following the example of other states in the region. Most likely, it is just one really badly run oil company that has been exploiting indigenous people or an attempt to benefit from soaring oil prices.

Also, Metafilter contributor Mark Wright makes a short, but noteworthy rebuttal of claims that nationalizing oil must be a lousy move (comment slightly formatted)

Claim: The long-term effect of this sort of move is generally quite negative. The message that it sends is that foreign investment is not safe in your country.

Rebuttal: Oil exporting countries are inevitably net lenders (Ecuador’s CAD is $58 million right now, and has no where to go but up) - they have no need for foreign investment, they can generate all the capital they need through trade. (They’re bad investment opportunities anyway, due to the Dutch Disease.

Claim: Right, but there aren’t too many examples of state-owned industry being a success for the populace at large.

Rebuttal: Well, there is Statoil, the national oil company of the worlds wealthiest nation … Can anyone think of an example of a populace at large benefiting from privately held oil?

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