Oil drop won’t ease Latam resource nationalism soon

CARACAS (Reuters) – Latin American energy producers are unlikely to ease taxes on foreign oil companies in the near term, despite tumbling crude prices, in an attempt to keep government coffers full.

Leaders such as Venezuela’s Hugo Chavez — at the fore of a charge for resource nationalism during a six-year oil rally — and Ecuador’s Rafael Correa are facing budget shortfalls as prices tumble from records over $147 a barrel to near $50.

The price drop has prompted Canada to ease back on a proposed royalty hike, but left-wing Latin American leaders will maintain high taxes on their vast oil reserves to ensure a steady flow of cash for social programs, analysts said.

Reuters