In the Headlines
May 21, 2020
Should State Firms Redirect Efforts Away From Oil?
Energy Advisor
Energy Partner José Zapata was featured in an Energy Advisor Q&A on how Latin American states should direct their investments in the oil industry. Lower prices and climate policy have challenged the industry's feasibility and raised questions about whether governments should focus on national companies or redirect their focus to other industries. Mr. Zapata commented that as countries assess the current situation, they should keep two factors in mind: competitiveness of terms and conditions and the feasibility of developing a local oil and gas industry. He added that traditional, more nationalistic approaches to energy and natural resources may no longer be profitable.
"Countries need a reality check and must determine if they are willing to pursue the pre-existing model while allowing the renewable energy mix to evolve, or simply be destined to a permanent frustration of having their NOCs seek opportunities outside in an effort to lose less," he said. "There is a limit to politics and nationalism when it comes to hard investments and low returns amid the current economic crisis."
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"Countries need a reality check and must determine if they are willing to pursue the pre-existing model while allowing the renewable energy mix to evolve, or simply be destined to a permanent frustration of having their NOCs seek opportunities outside in an effort to lose less," he said. "There is a limit to politics and nationalism when it comes to hard investments and low returns amid the current economic crisis."
READ: Should State Firms Redirect Efforts Away From Oil? (Subscription required)