Energy producers - May 4
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Bolivia takes over four energy companies
Carlos Quiroga, Reuters via Guardian
Bolivia will pay $43 million to take controlling stakes in four energy companies, one through an agreement with Spanish oil company Repsol and others through state decrees, the government said on Thursday.
Bolivia's state energy company YPFB signed a deal with Repsol, agreeing to pay $6.3 million to acquire enough shares to give it a majority stake in Repsol's Andina, one of Bolivia's biggest energy companies.
The announcement came exactly two years after leftist President Evo Morales launched his nationalization of Bolivia's energy industry in a bid to increase government income from the country's rich natural gas fields.
(1 May 2008)
Iran’s yen for the euro
Iran, the world’s fourth largest oil producer, has reportedly shifted from the US dollar to euro and yen as currencies in which it will trade its crude produce. This is seen as a major blow to the US dollar as a reserve currency.
Iran’s move may be determined partly because of its ongoing political stand-off with the US. However, that need not be the only consideration to have prompted Iran to shift to the euro and yen. Many oil exporting nations, as indeed other emerging economies accumulating dollar reserves, have been worrying about the structural weaknesses in the US economy and the prospect of the dollar’s long-term decline.
(2 May 2008)
Gulf States May End Dollar Pegs, Kuwait Minister Says
Fiona MacDonald and Matthew Brown, Bloomberg
Gulf states are considering dropping their pegs to the dollar after the U.S. currency's decline stoked inflation across the region, Kuwaiti Finance Minister Mustafa al- Shimali said.
``Yes, there are some'' Gulf Cooperation Council states considering dropping their pegs to the dollar, which has fallen 13 percent against the euro in the last 12 months, al-Shimali said in an interview in Kuwait late yesterday without naming the countries. ``Some countries will do what we are doing.''
Al-Shimali's comments may restoke speculation of a change in Middle East currency systems that eased after the United Arab Emirates and Qatar last month ruled out any revaluation or dropping the dollar peg in the short term. The issue will remain a key issue as long as inflation remains high.
(1 May 2008)