Oil nationalism makes life diffcult for multinationals

0 Comments | AFP, October, 2006

PARIS (AFP) — Russia's hard-nosed approach to foreign energy investors, Ecuador's threatening noises on oil contracts and Iran's reduction of Japan's share in a huge oil project reveal the weakness of multinationals faced with producing countries that want to dictate their own terms. "There has been a very significant change in the balance of power between international oil companies, and it's clear today that it is the national companies that have the upper hand," said Olivier Appert, president of the French Oil Institute, or IFP.

Examples are legion. In Russia, Shell is under pressure from the authorities over the Sakhalin oil and gas field, while France's Total is having difficulties with the Khariaga field. Even more ominously for foreign companies, Russia's...