As Profits Surge, Oil Giants Find Hurdles Abroad

To many Americans, oil companies like Exxon Mobil or Chevron appear all powerful, pocketing record profits as energy costs soar. But in many countries around the world, high oil prices are also making life considerably harder for big oil companies.

Sharply higher energy prices have shifted the power to oil-producing countries, as some governments seek a larger share of the riches. As a result, even as Western oil companies expand their reach through acquisitions and multibillion-dollar projects, a resurgence of nationalist policies is weakening their influence.

“We’ve seen a return to a 1970’s style of resource nationalism riding along the crest of high prices,” said Daniel Yergin, the chairman of Cambridge Energy Research Associates, a consulting firm. “During times of low prices, governments are keen to open up. But when prices are high, they have the high cards.”

This trend could lead to fewer investments by Western oil companies, lower production, and with more limited supplies, even higher prices at the pump. So far, the power shift has taken on various shades and tones. In Bolivia and Russia, governments have taken outright control of oil and gas fields; in Venezuela and Britain, they have increased taxes; and in Nigeria and Kazakhstan, they have given highly preferential treatment to state companies.

NY Times