For centuries, Bolivia made it easy for prospectors to mine, from the Spaniards who plundered gold to the tin barons of the 19th century to the multinational energy companies that flocked here in the 1990s to develop Latin America's second-largest natural gas deposits.
But like many energy-producing countries these days, Bolivia has pulled the welcome mat. With an angry population demanding a larger share of the benefits, and some groups even calling for outright expropriation, the government recently raised royalties and taxes to among the highest levels in Latin America.
It would appear to be an exceptional episode of revolutionary zeal translated into energy policy. But Bolivia is just the latest of several oil- and gas-rich countries in Latin America and beyond that are squeezing energy companies like never before.
With prices of crude oil and natural gas at record highs, and ideology increasingly propelling government policymakers, countries are demanding a larger slice of the pie. In some cases, they are unilaterally canceling long-term contracts that gave energy companies highly favorable terms.
"They think that since there is more revenue coming in, they can take a much harder line in negotiations," said Lawrence Goldstein, president of the Petroleum Industry Research Foundation, an industry-financed analysis group in New York.
"In some cases, they don't even need to negotiate," he said.
no role
Many of the world's giant energy producers, among them Saudi Arabia, Kuwait, Iran and Mexico, play no role in the trend since their state-owned companies either fully control or dominate production.
But Russia, Venezuela, Kazakhstan, Nigeria and Algeria, together accounting for 20 percent of the world's global supply but dependent on foreign and private domestic companies, are another story.
They are among the countries that are tightening the terms -- sending a message that has reverberated in the industry at a time when supplies are tight. Some industry representatives call the new terms a chokehold that will slow investments, just as the world needs more oil to lower prices.
"Both the tighter terms and the fluidity of contract terms will cause companies to second-guess further investment," said Michelle Billig, director of political risk at PIRA Energy Group, a New York consulting firm.
"The willingness of countries to change the terms halfway through the project complicates any type of investment decision because you don't know what terms you're going to have at the end of the project," he said.
To governments, though, the squeeze is justified because of the huge amount of money that oil companies are generating. A barrel of oil traded above US$60 last week, before settling last Friday at US$58.75. Natural gas, which has doubled in price in the US in five years, is in high demand the world over.
"They've never had earnings of this order," said Victor Poleo, a left-leaning oil economist in Venezuela. "So this awakens an insatiable appetite in governments for that income."
The increasing prices have been a windfall for oil companies, which are registering record profits.
Exxon Mobil Corp saw profit jump 44 percent to US$7.86 billion in the first quarter of this year, while Royal Dutch/Shell's profit climbed by 28 percent. The combined net income of the four biggest oil companies -- Exxon Mobil, BP, Shell and ConocoPhillips -- increased 39 percent from a year earlier, the companies reported in April.
Measured another way, Exxon Mobil's revenue for the first quarter -- US$82.05 billion -- is nearly as much as the US$107 billion gross domestic product in oil-rich Venezuela, which supplies much of its crude to the US.
The big profits are not lost on people like Abel Mamani, the leader of Fejuve, an influential antiglobalization group in Bolivia that has fought oil companies. Angry protests against the country's energy policies have already led two presidents to resign in 20 months.
The latest resignation came last month after the Bolivian Congress sharply raised taxes on foreign energy companies, but not enough to placate some groups -- the protests continued and talk of nationalization was in the air.
"This is a necessity," Mamani said in an interview. "We are tired of these companies taking advantage of our resources."
Energy analysts say such a hard line could backfire in struggling countries like Bolivia or Ecuador, where energy reserves are large, but where the industry still needs to be developed.
LEGAL ACTION
Repsol YPF, a Spanish energy giant whose Bolivia holdings account for a small amount of worldwide production, has publicly said that it is considering legal action against Bolivia for changing contracts.
"The problem in Bolivia is companies are just now making investment," said Ed Miller, the president of Gas TransBoliviano, a pipeline group owned in part by Shell, Petrobras and British Gas. "This is going to have disastrous effects in the long term."
That may not be the case in most countries that are tightening terms.
"Countries like Venezuela, which are in a class on their own, can be more demanding in pushing for a government take," said Roger Tissot, director of countries and markets at PFC Energy, a consultant group based in Washington.
In a sense, companies are captives of their own success. Big oil may have invested billions in technologically challenging sites, like Venezuela's Orinoco Belt or the Caspian Sea, but now they are reaping the benefits, with oil flowing out and petro-dollars flowing in.
They are not about to abandon those projects now. Nor do they have many options for new investments, since many of the world's top energy-producing countries restrict foreign investment.
"There are very few countries with attractive reserves that are open to foreign investment," Billig said. "Those which are open recognize their bargaining power."
PIRA Energy, which has completed a report on the trend, says some of the toughest new policies are in Russia, the world's second-largest oil exporter. In its drive to assert control over the industry, the Kremlin aggressively sought back taxes last year against Yukos, the country's largest private oil company, leading to its collapse.
The move also stifled the political ambition of Mikhail Khodorkovsky, the founder of Yukos, who was sentenced in May to nine years in prison.
Last year Russia raised the production tax rate by 15 percentage points and raised the crude export tax for oil that sells for more than US$25 a barrel, while maneuvering to give state-run Gazprom, already the world's largest producer of natural gas, greater reach over the country's energy resources.
More ominously for oil companies, Russian legislators are discussing whether to limit foreign participation in certain large-scale projects.
NEW LAW
Kazakhstan, a former Soviet republic, is also toughening terms, with a new law calling for a 90 percent minimum government share of all profits when oil is selling above US$27 a barrel and at least a 50 percent state participation in projects.
In Nigeria, Africa's largest exporter, the government is levying new royalties, and its new offshore contracts are expected to be far more restrictive than past agreements.
No country's energy policies has attracted as much attention as those of Venezuela, whose government has turned the state oil company, Petroleos de Venezuela, into an engine for social change, while increasing taxes and royalties and changing long-term contracts with foreign multinationals.
Venezuela's government, led by leftist President Hugo Chavez, is planning to spend up to US$4 billion of the state oil company's budget this year on a range of programs, from clinics to literacy programs to subsidized markets. Foreign companies, which produce 1.1 million barrels a day out of a total daily production of 2.6 million, are needed to help generate those revenues.
The shift could not be in sharper contrast to the early 1990s, when the government opened up the energy sector to foreign investment and offered sweet deals to companies like ConocoPhillips, ChevronTexaco, Total of France and Statoil of Norway. In the vast Orinoco Belt, companies paid only a 1 percent royalty, a level designed to overcome concerns about drilling for heavy, poor quality oil.
That all changed last October, when Chavez's government increased the royalties in the Orinoco to 16.6 percent, ending a virtual tax holiday. Venezuela is now hoping to raise the income-tax rate on the projects in the Orinoco from 34 percent to 50 percent, the country's energy and oil minister, Rafael Ramirez, told reporters last month.
In other parts of the country, the government has also toughened terms, seeking as much as US$3 billion in back taxes, raising taxes and requiring majority state ownership. Companies are still welcome, the government says, but it is making clear that the state is in charge.
"The higher prices permit countries to have the higher revenues for development," said Nicolas Maduro, president of the National Assembly in Venezuela. "Even with the higher royalties and taxes, the oil company earnings are still enormous."
A series of strong earthquakes in Hualien County not only caused severe damage in Taiwan, but also revealed that China’s power has permeated everywhere. A Taiwanese woman posted on the Internet that she found clips of the earthquake — which were recorded by the security camera in her home — on the Chinese social media platform Xiaohongshu. It is spine-chilling that the problem might be because the security camera was manufactured in China. China has widely collected information, infringed upon public privacy and raised information security threats through various social media platforms, as well as telecommunication and security equipment. Several former TikTok employees revealed
Two sets of economic data released last week by the Directorate-General of Budget, Accounting and Statistics (DGBAS) have drawn mixed reactions from the public: One on the nation’s economic performance in the first quarter of the year and the other on Taiwan’s household wealth distribution in 2021. GDP growth for the first quarter was faster than expected, at 6.51 percent year-on-year, an acceleration from the previous quarter’s 4.93 percent and higher than the agency’s February estimate of 5.92 percent. It was also the highest growth since the second quarter of 2021, when the economy expanded 8.07 percent, DGBAS data showed. The growth
At the same time as more than 30 military aircraft were detected near Taiwan — one of the highest daily incursions this year — with some flying as close as 37 nautical miles (69kms) from the northern city of Keelung, China announced a limited and selected relaxation of restrictions on Taiwanese agricultural exports and tourism, upon receiving a Chinese Nationalist Party (KMT) delegation led by KMT legislative caucus whip Fu Kun-chi (傅崑萁). This demonstrates the two-faced gimmick of China’s “united front” strategy. Despite the strongest earthquake to hit the nation in 25 years striking Hualien on April 3, which caused
In the 2022 book Danger Zone: The Coming Conflict with China, academics Hal Brands and Michael Beckley warned, against conventional wisdom, that it was not a rising China that the US and its allies had to fear, but a declining China. This is because “peaking powers” — nations at the peak of their relative power and staring over the precipice of decline — are particularly dangerous, as they might believe they only have a narrow window of opportunity to grab what they can before decline sets in, they said. The tailwinds that propelled China’s spectacular economic rise over the past