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Nationalizing Oil in the 1970s

Dean Goodermote and Richard B. Mancke

Year: 1983
Volume: Volume 4
Number: Number 4
DOI: 10.5547/ISSN0195-6574-EJ-Vol4-No4-5
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Abstract:
National oil companies emerged during the 1970s as an important force within both oil-exporting and oil-importing countries. By 1980 they were producing and marketing well over half the crude oil available for sale on world markets. These oil companies prospered within oil-exporting countries as events increasingly confirmed that the principal source of economic power in the oil business was sovereign control over oil reserves rather than private control over technical, managerial, and capital resources. During the 1970s, many oil-exporting countries sought to exploit their new-found market strength and exercise greater control over their oil industry either by building up existing government-owned oil companies or by seizing the opportunity to create new ones.



Resource Nationalism - Limits to Foreign Direct Investment

Gavin L. Kretzschmar, Axel Kirchner, Liliya Sharifzyanova

Year: 2010
Volume: Volume 31
Number: Number 2
DOI: 10.5547/ISSN0195-6574-EJ-Vol31-No2-2
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Abstract:
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.





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