Facebook LinkedIn Twitter

IAEE Members and subscribers to The Energy Journal: Please log in to access the full text article or receive discounted pricing for this article.

Resource Nationalism - Limits to Foreign Direct Investment

Despite a global trend toward the privatization of state assets, host governments are consolidating ownership over strategically important domestic oil and gas resources, effectively limiting corporate foreign direct investment. These findings are supported by an analysis of global reserve acquisitions for the period 2000 � 2006, a period which saw listed national oil companies (NOCs) acquire over 82% of their reserves domestically, compared to only 25% for commercial operators. We also perform a regression analysis and find that political risk and reserve size are strongly related to state ownership retention, while the degree of state control is positively related to OPEC membership. Foreign direct investment is shown to be increasingly constrained to assets in low-risk developed countries or marginal oilfield assets.

Purchase ( $25 )

Energy Specializations: Petroleum – Policy and Regulation; Energy Security and Geopolitics – Geopolitics of Energy; Natural Gas – Policy and Regulation; Energy and the Economy – Energy as a Productive Input; Energy and the Economy –Economic Growth and Energy Demand; Energy and the Economy – Resource Endowments and Economic Performance; Energy and the Economy – Energy Shocks and Business Cycles

JEL Codes:
E60 - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook: General
Q48 - Energy: Government Policy
O13 - Economic Development: Agriculture; Natural Resources; Energy; Environment; Other Primary Products
Q34 - Natural Resources and Domestic and International Conflicts
F44 - International Business Cycles

Keywords: Resource nationalism, Foreign direct investment, Oil and gas resources, State companies

DOI: 10.5547/ISSN0195-6574-EJ-Vol31-No2-2

Published in Volume 31, Number 2 of The Quarterly Journal of the IAEE's Energy Economics Education Foundation.