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93 comments on A Nice Counterexample

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Stuart Staniford on October 1, 2005 - 3:18pm Permalink | Subthread | Parent | Comments top
West Africa is one notch short of a war zone. It's a place no rational business person would set up shop without an incredibly good reason. The "risk" part of the "risk/reward" tradeoff is obviously huge (as in Nigeria in the last couple of weeks). So that suggests prospects are worse elsewhere right?
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JD on October 1, 2005 - 8:33pm Permalink | Subthread | Parent | Comments top
No, it suggests that West Africa is one of the few places where oil hasn't been nationalized.
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ChrisPhoenix on October 2, 2005 - 2:13am Permalink | Subthread | Parent | Comments top
OK, but why is nationalizing oil a Bad Thing, from this point of view?

If I understand correctly, it's because governments don't invest in enough capacity to get the oil out of the ground fast.

Why not?

  1. Governments are fundamentally corrupt and inefficient.

  2. They know peak oil is coming, so they want to save it for later.

  3. ???
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JD on October 2, 2005 - 9:33am Permalink | Subthread | Parent | Comments top
Good point. I personally believe that nationalized oil is a good thing because it leaves oil in the ground for later, causes higher prices, and will make the peak more of a plateau and gentle decline. If the OPEC governments could only be a little more incompetent and inefficient... then I'd be really happy!
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