Bolivia stirs fears of energy producer power

Bolivia’s startling seizure of its gas fields has intensified fears of “resource nationalism” tightening global energy supplies and inflating prices for years to come.

Emboldened by record oil prices, producer governments from Venezuela to Russia are grabbing more money and control from foreign investors.

“When government action, whether it goes by resource nationalism or any other name, dampens or deters investment — it’s going to fuel the money coming into the market and be price supportive,” said Michael Wittner of investment bank Calyon.

..Disruption to Europe’s gas supplies due to a dispute between Russia’s state gas monopoly Gazprom and Ukraine over pricing deepened concern about producer power.

Without outside help, production from Russia, the world’s second biggest oil exporter, could slow further.

“Russia offers clear evidence of how resource nationalism can have a material impact on supply growth,” said Kevin Norrish of Barclays Capital.

Reuters