Look at this picture and THE Queen is screaming about poverty????

[dennisr]

Swimming in oil reserves, only problem, getting it to market. No pipelines, no refining capacity, no $$$$ to exploit. Talk about not reinvesting, look in the mirror Argentina. However, we got FUTBALL for all. Government is so broke they are attempting to trade biodiesel, soy for LNG shipments: natural gas. No takers. Going to be a very cold Winter for some.

 

[ElQueso]

One thing I don't quite get is your point on nationalization under international law. I don't think you example of the car on the street applies. My understanding all the way back to graduate Macro-Econ and International Poli Sci is that, under international law, country's do have a legal right to do this. There are numerous cases. Can you cite me sources that say otherwise? I'd be interested in reading those.

You're correct - I used the wrong word. We were talking nationalization because that's the word that everyone's been using. I was being loose with terms.

The correct term here, I think, is actually expropriation. Considering that they are not negotiating with Repsol, considering that they never paid a huge debt from previous loans (I've seen many pieces of propaganda previously here that say something along the line of "ignore the invalid foreign debt") and considering that they don't have much in the way of reserves to begin with, I doubt very much that Repsol will get a fair market price for the company.

I don't believe expropriation is legal.

Do they have the know-how to run an oil exploration and refinement industry? No.
Is nationlization an easy way to gain revenues for a country on the brink of economic collapse? Yes

As I mentioned, this strategy may help them for the short term, until they screw it up. Overall, I can't imagine that it will actually do them any good.

However, with the size of the shale reserves here I think companies are still going to line up to get in. So far, I think the risk will be worth it (Depending on how far/fast other nationlizations go).

Well, the two companies you mentioned are huge, with deep, deep pockets.

Lining up? Maybe. But I don't think they can be bullied into raising exploration and production of oil where losses continue to occur.

My uncle, who was once President and CEO of Tenneco Energy and chairman and CEO of PennzEnergy, now operates a small exploration company in Venezuela. He's almost doing this as a hobby nowadays, being retired from the sort-of medium boys (not the huge boys like Exxon-Mobile!). They continuously worry about nationalization/expropriation by Chavez.

So you could be right. Oil makes strange bedfellows. But I wouldn't bet on Argentina being able to keep things up. We'll see how bad things get and how power-hungry Cristina is I don't think she's as capable as Chavez overall.

 

[GS_Dirtboy]

I don't know very well her power position within the government. So far, at least publically, she's getting a lot of support. How strong is her opposition inside?

Relatedly, now Bolivia is getting into the act:
http://www.reuters.com/article/2012/05/01/us-bolivia-electrica-idUSBRE8401JX20120501

The bottom line here is Spain has little recourse. Not only are they signators to trade treaties but Spain is reeling from historic unemployment and other domestic issues of primary concern. The timing of Christina's move was not accidental.

 

[ElQueso]

Yeah, I admit I am lost on some of the subtleties of Argentine politics. When I say Cristina, I must necessarily include those who back her for power, whether she be actually the one who invents strategy, or if she is just a figure head for those who do.

I read an article recently that talked about the average terms of Argentine legislators, presidents and supreme court justices. Since 1930, democracy in this country has been interrupted 6 times by coups. Before Peron's time, judges leaving the bench for natural reasons (retirement or death) were 82%. Since Peron's time, only 9% left for natural reasons. The other 91% leave because the executive branch either institutes impeachment or threatens them and they leave voluntarily. The article places the blame of such shaky institutions on the instability of democracy in Argentina.

http://cdi.mecon.gov.ar/biblio/docelec/udesa/WP30.pdf

I have mentioned before that Cristina (herself or a more profound political base with her at the head) seems to me to be interested in creating a bit of economic chaos, with the intent of breaking down further democratic institutions and make it easier to practice more absolute control.

Considering it's happened 6 times in the last 80-some-odd years, it's not far-fetched to think that she is trying for #7.

Latin America ought to think about what they're doing. They blame everyone but themselves for their problems, but the fact is, they haven't learned, within their own countries, to create an environment that encourages investment and development. Too many governments like Chavez, Cristina and Morales take advantage of the ignorance the leaders of those countries have fostered to talk about anti-colonialism being the root of all evils and they are going "set things straight."

The US and Great Britain seemed to come out OK as far as colonialism goes, even after a bloody war for independence and a renewed invasion some years later by the British colonial power.

In this day and age, countries can't develop without the aid of other countries, whether it be in the form of investment, loans, free trade, whatever.

Argentina's only real problem is it's lack of commitment to the rule of law and order in my opinion, not some long-gone colonial power period. Anything besides committing to stability is just smoke and mirrors, including using anti-colonialism as a basis for an excuse to steal from companies.