the oil and gas sector feedback

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  • 7/23/2019 The Oil and Gas Sector Feedback

    1/1

    6. Case: Bolivia Nationalizes the Oil and Gas Sector

    Question (a)

    The question intends to analyze the benefits and drawbacks of nationalization in general.

    The answer explain the benefits of nationalization such aspublic welfare, economic

    prosperity, maximum utilization of resources, development of backward Area, protection

    of public interest, employment opportunities etc. On the drawback side of nationalization,the answer explainscomplex management, inefficient functioning, mismanagement, drain

    of resource, low investment, faulty performance appraisal, slow decisionmakingetc.

    Question (b)

    The question intends to analyze the future outlook of the !olivian oil and gas sector.

    The answer explained that !olivia has the second largest gas reserves in "outh America.#t also stated that the nationalization of !olivia$s oil and gas resources will have a heavy

    impact upon the longterm development of the energy sector.There will be hardly any

    significant operational changes in the short term, either in production or in supply toArgentina and !razil. %ongterm developments will be shaped by negotiations with

    current producers, mainly &etrobras and 'epsol (&), as well as by the final role to be

    played by a state owned company *(&)!+.

    #t is also explained that development of !olivia$s oil and gas sector requires massiveinvestments in infrastructure and technology. The political turmoil, influenced by events

    in the oil and gas sector, has affected the country since -- and introduced significant

    uncertainties regarding the stability of the business environment.

    /owever, the answer could have analyzed the 0orales$s road map of 1AndeanAmazonian 2apitalism$ which could build a strong !olivian state and transfer the surplus

    to the communities. #t could have discussed the implication of waning 3" influence in

    "outh American politics as the oil and gas sector was nationalized in !olivia.