Latin Oil Romance

They’re falling for it. Venezuela, Ecuador, and Bolivia – South America’s three hydrocarbon gusher states – are placing high hopes for prosperity on petroleum wealth. That’s risky enough in itself without them also moving toward more state control of oil and gas.

In Bolivia, street protesters are even demanding outright nationalization of the industry. Last week, tens of thousands of poor indigenous people and industrial workers successfully pressured the government to pass a law that sharply raises taxes on foreign energy companies. Bolivia’s biggest foreign investor – Brazil’s state-owned Petrobras – promptly announced it will scale back investment in that neighboring country.