– Small African Country To “Seize” Chinese Oil Exploration Assets (ZeroHedge, June 5, 2013):
It’s one thing for broke Argentina to nationalize assets of just as broke Spain. However when tiny west-African country Gabon decides to “seize” assets from three international oil companies including China’s petrochemical giant Sinopec, things not only get interesting, but puts a brand new pawn on the global geopolitical chessboard. But why is Gabon seeking to antagonize some of the primary participants in its crude extraction supply chain? Simple: leverage, or its own perception thereof. As the FT reports, this surprising move comes as Gabon prepares to “launch a licensing round for the deep waters off its coast. Experts say reserves in the Gabon Basin could rival deep offshore discoveries in Brazil.”
So what happens next? The same as when every banana republic reverts to its banana republic stats – corporate partners are alienated, a rogue oligarchic regime proceeds to spend whatever money it has managed to steal in recent years, the government is destabilized, a military coup follows, currency devaluation, hyperinflation, economic collapse, until one oligarch is replaced with another (future) who attempts to restore relations with the same corporations that are being nationalized today.
Tensions between the industry and Gabon’s oil ministry come as a number of African countries attempt to wrest better terms from foreign multinationals and clamp down on transfer pricing and tax evasion.