Energy Information Administration
FedStats
Introduction
Executive Summary
Chapter
1. Privatization: Motives and Methods
Chapter 2. Profiles of
Petroleum Privatizations in OECD Countries
Chapter 3. Latin American
Petroleum Privatization
Chapter 4. Privatization in
Socialist and Former Socialist Nations
Chapter 5.
Privatization and the Genesis of the Multinational Power Company: Underlying Factors and
Regional Trends
Chapter 6. Recent Trends in
International Investment and Trade in Coal
Privatization and the Globalization of Energy Markets reviews recent global efforts to privatize energy resources and outlines the opportunities and challenges privatization has presented to U.S. and foreign multinational energy companies.
Scores of nations are privatizing their state-owned energy companies. For several reasons this development should be of particular importance to U.S. investors, energy analysts, energy policy makers, and energy producers and consumers. U.S. companies often have been key sources of financing the privatization of many foreign energy companies, a development of concern to both investors and policymakers. Policymakers in this country can also benefit from analysis of the various means by which different countries have adopted different privatization schemes. For instance, the far-reaching efforts at energy privatization in the United Kingdom have often been held up as a case study for other countries considering energy privatization. Privatization will also play a major role in determining the availability of future energy supplies and prices--a concern to both energy producers and consumers.
The study of recent energy privatization efforts can be approached from several viewpoints. There is a regional aspect to privatization. For example, in Latin America energy privatization efforts can be viewed as a sweeping regional adoption of free market economics. However, there is also an energy sector perspective to privatization. For instance, while some nations have welcomed freer foreign investment in energy sectors, such as petroleum refining or marketing, some have remained reluctant to offer the same level of unrestricted investments in the petroleum production sector. Further, there is the perspective of the energy enterprise, or the nature of the company being privatized, since the privatization of companies such as British Petroleum differ markedly from the privatization of, for instance, the oil companies of the Former Soviet Union.
In early 1996, the Energy Information Administration publication Performance Profiles of Major Energy Producers 1994 took an initial look at the privatization of state-owned energy industries in China, Latin America, and the Former Soviet Union (FSU), and the opportunities that these privatizations presented to the major U.S. petroleum companies. That report focused primarily on petroleum investments. This report, Privatization and Globalization of Energy Markets, expands the coverage of that effort in a number of ways. The group of energy companies studied in this report includes not only the major U.S. petroleum companies but also many major foreign companies. The latter group consists of both state-run energy enterprises, recently privatized energy enterprises, and foreign multinationals that have long been privately held. The privatization of non-petroleum energy industries, such as electricity generation and transmission, natural gas transmission, and coal mining, are also discussed in this report, as are the overseas investments made by electric companies, natural gas companies, and coal companies. The regional coverage of the current report has also been expanded to include, for example, privatization efforts in such areas as non-FSU Europe, the OECD, and a number of developing countries.
Energy privatization is a large development and is taking place in more countries than those covered in this report. The purpose of this report is to highlight some of the more important privatization efforts occurring in global energy. For instance, since the late 1970's the United States has undertaken a series of efforts to deregulate domestic energy markets. This effort, however, is described thoroughly in other Energy Information Administration publications, and hence is not addressed in this report. There are several other dimensions to global energy privatization that fall outside the purview of this report. For instance, many foreign countries have adjusted their tax regimes to enhance the competitiveness of their energy industries, which also is a form of privatization. Although this report often makes reference to energy related investments that are generally deemed to be relatively risky, it is beyond the purpose of this report to quantify risk. Further, whatever disadvantage U.S. companies face relative to many of their newly-privatized major competitors (due to such factors as embargoes and other trade restrictions) also falls outside the scope of this report.
This report is organized along the following lines. The first chapter addresses the economics of privatization--what motivates countries to privatize, and what countries and companies hope to gain from it. The second chapter discusses petroleum privatization efforts among non-U.S. OECD nations. The third chapter reviews petroleum privatization efforts in Latin America. The fourth chapter looks at privatization in socialist and former socialist regimes. The fifth chapter reviews privatization efforts in global electric power generation, transmission, and distribution industries. The sixth chapter discusses recent developments surrounding the privatization and globalization of world coal. Lastly, the appendix provides the reader with a reference source of summarized information.