Since 50s, many producing countries have nationalized oil wells. And now, oil companies are no longer much in market terms. Between 10% (figures from the Ministry of Economy, Finance and Industry) and 16% + 19% full access to limited access (log counts the world of August 10, 2006). Between 10% and say 25%. One may wonder if it was not done on purpose. For several reasons.
1) Justify the underinvestment
If the market was still controlled most of 60/70% by oil companies, the fact that the level of investment is low might sound weird. Of course, there was a long period of low prices, which made it seem logical low level of investment. But still, such a small investment for so long would have raised question if oil companies were the only elements of the equation. Especially between 1945 and 1973, prices were very low, yet it has not prevented oil companies from investing with a vengeance.
And then there's always the problem of having possibly small private companies from making the prospecting. However, for large companies, may optionally include a lack of investment at certain times (since they already have large reserves), both for mid-size companies, it may be dubious, since their interest is to find new fields to become more important. But if the market is essentially in the hands of the states, so there's no search for new deposits is much less weird.
With the nationalization of reserves, there are two situations. Either the state invests only (through a state company), or the state leaves a national private company or make foreign investment in research and drilling and shares some recipes with it.
1, a) Investments made primarily by state
If there is no investment made by the producing countries, we say that is because they have the skills to conduct research.
And we will also say that is because the countries do not have enough money to invest in finding new deposits. What is credible for a lot of them, because many producing countries are poor countries. But even for countries more or less rich, it will be before the fact that the state is too much debt (and they are almost all) to justify the absence of new investments.
can also say that the statements in question are investing elsewhere, either in anticipation of the end of oil (in the local real estate, or else in the European and Asian companies, as is the case for the Gulf monarchies Persian), either to help the people, or simply to develop the country, or to reduce taxes, etc. ... While the oil companies, although they can of course invest in other sectors to diversify, will reinvest mainly in oil.
Or we will say it is because rulers are corrupt and being amazed at the expense of pocket investment.
For others, it will highlight the environmental policy constraint. Environmentalists would pressure so that there is no new drilling in some areas. Cause that would be raised in the case of rich countries (eg USA).
This is for the acts of investment initiated by the states. In the case where the government allows private companies to take the risk of investing, there may be several reasons that will lead to an absence or weakness of the investment or failure of investments.
1, b) Investments made by private companies or
In some countries, administrative hassles and allow lengths to justify a lack of investment or investment lower than expected. For example, in France, it seems that at least 2 years to get a right to an exploration of the soil. If the price bubble lasts only 3 or 4 years, it leads to new sources that may be advertised as being more profitable (it's probably totally wrong, but that's the reason put forward for doing nothing ).
Companies can also say they do not invest because there are various elements dissuading them from doing so, as rebels or political instability that make risky investments or when a junta that is hostile to them. It will also say that oil companies are not satisfied with the contract with the country, are unwilling to invest.
The government can tell its side of the company in question is too greedy. It can be dragged out negotiations with several companies to see which one will be chosen to make the investment.
Once we have two players, it makes things much more complex, and they can pass the buck by saying that if there is no investment, because it also poses problem. And suddenly, nobody asks too many questions about the lack of investment, because there is always a reason for that which seems logical.
In both situations (public or private investment), the purpose of the clique that governs us is reached. Investment in research for new oilfields have been drastically reduced for tens of years. What has prevented prices from collapsing.
course, there is the problem of loss of control. But since the masters of the world control about all governments, it poses no problem to delegate oil production statements. All will serve well in the desired direction.
Note also that by chance, the investment decision is always done in times of rising prices. While given the history of price increases in the oil market (generally for relatively short periods), it is rather obvious that we need to do that after a certain period of falling prices, to get a production up to when prices are high.
2) Accusing producing states the responsibility of price changes instead of oil companies
Passing the power of oil companies to governments, was cleared in large part by oil companies accused of price manipulation and price fixing, since the power output is, for the majority of reserves, more between their hands.
Now, the charges are transferred to different countries who want to maximize their profit. And in people's heads, it is natural that these countries are seeking to make money. While with the oil companies, there are accusations of wanting to get rich on the backs of the people. So if there is more or less agreement on prices is more legitimate, it helps.
3) Do not see the producers as a united power, thanks to the large number of actors and their diverse objectives
Having a large number of producers can also ensure that no can not see them as a united power. Everyone is supposed to be independent. They may have common interests. But often, they will be diverging (or presented as diverging), even on the simple subject of oil prices. Especially there
producing countries that are also importers, because they do not produce enough to be autonomous. Instead of having a company that has an interest to have high prices, there is a producing state, but importer, who has an interest in having low prices. So we should already have some of the producers who have different interests than others when the price level.
And then there are countries that are dictatorships, while others are more or less theocracies (some Muslim countries), and other democracies. There are some who are poor, there are some who are rich. There are powerful (USA, Russia, England, etc ...) and others that are weak (small state in South America, Africa, etc. ...). It allows for more sources of conflicting interests and objectives. What makes it even harder to see these actors as a united power.
course there are times when it highlights that many of these players were able to agree on prices. But these periods of agreements will always be portrayed as fragile and temporary situations.
4) Give an impression independence statements
In addition, having nationalized the wells gives the impression that those countries that have done are truly independent. If they could successfully oppose the oil companies, yet so powerful, and in the U.S. and the UK, But also extremely powerful, is that their independence is real.
So all these countries are doing seems to be the result of sovereign countries. It does not seem dictated by others. The idea that the actions of these governments to follow a logical internal policy is credible.
5) Scramble the cards, complicate the situation, each time having an easy explanation for price variation
Having many producers with very different interests can confuse the issue. As mentioned above, there are dictatorships, theocracies, democracies, poor countries, rich and poor, powerful. All this leads to the complex variety. And with such complexity, it makes the thing incomprehensible to the layman. What makes that one can easily justify anything and everything.
And thanks to this situation, we can justify price changes in both directions. We can justify low prices in part due to the misunderstanding of state and the poverty of some who need to produce much to buoy the economy. And you can justify high prices by saying that at that time, states have failed to agree on prices. By presenting the situation of Understanding as precarious, one can justify price changes each time by a better agreement or disagreement between the producing countries. Whereas if the power production was still mainly in the hands of private companies, the public might find the odd variations in price.
6) Limit the power companies to hide the uniqueness of power controlling oil production
One might also say that on a sector as huge as economically and financially profitable, there is the danger that companies that dominate this sector eventually redeem all companies exist in the economy (as you can see now, where there is more than 4 or 5 big companies). So the masters of the world limit the power of these companies voluntarily and scatter power into many hands, so there is no economic power too visible from some companies.
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