Edited by Kim Talus
Chapter 18: Corruption and the energy sector: Inevitable bedfellows?
The energy sector has been global before globalization became a household word. At least since 1901, major oil and gas companies have ventured abroad searching for commercially viable resources that are open to development. In 2011, the investment flows traceable to coal, oil, and natural gas investments alone represented $105 billion of FDI. That does not count the trade and investment activity that follows in their wake, supplying goods and services to the E & P firms. Globalization has changed the sector, however. In recent years, national oil companies - always a feature of the landscape - have increasingly taken a major role in projects in their own countries and sometimes even overseas. Statoil of Norway, Petrobras of Brazil, Sonangol of Angola, China National Petroleum Company (CNPC), the Nigerian National Petroleum Company (NNPC), Petroleos de Venezuela, SA (PDVSA), and others throughout the developed and developing world, many espousing strong resource nationalism policies, have made their policy voices heard. Their ability to control the resources in their own jurisdiction, to dictate the terms of concessions and production sharing contracts, to mandate increasing local benefits (indigenization) and government 'take,' have significant implications for the terms of transactions and the financial benefits flowing from these projects. The discovery of deepwater offshore deposits (for example, off the west coast of Africa, and the 'pre-salt' deposits in Brazil), have required more capital and know-how to effectively access and develop those resources.
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