4 ms·
About 10 years ago, I would given some credence to such articles with simplistic solutions (privatize and fire workers) to complex problems. Now I recognize it
by psranga 17y ago
About 10 years ago, I would given some credence to such articles with simplistic solutions (privatize and fire workers) to complex problems. Now I recognize it as a potentially slanted article.
In particular foreign private oil companies have a long history of not paying adequate royalties to the countries they operate in (which is the reason they get nationalized after popular revolts). Even the US govt sued Exxon in Alabama for systematically underpaying royalties (they lost, but whatever).
I remember a memorable article circa 2002 which said China was on the brink of collapse due to bad loans held by it's state owned banks (yeah, right). Another one chided China for not given a majority of board seats in partially-privatized banks to foreign investors with small shareholdings.
- hughprime 17y agoIn particular foreign private oil companies have a long history of not paying adequate royalties to the countries they operate in (which is the reason they get nationalized after popular revolts). Even the US govt sued Exxon in Alabama for systematically underpaying royalties (they lost, but whatever). What do you think is a "fair" amount of royalties to pay? In my opinion, whoever owns the land should get 100% of whatever income they can derive from it. If Shell wants to buy some land, they should own whatever oil they can suck up from under it.
- psranga 17y agoCredit card companies charge 1-2% of revenues. VC and hedge funds also charge management fees in that ballpark. I would say 1-2% of profits after deducting all operating and capital expenses is a good royalty figure. In most countries, all mineral rights lie with the govt (I agree with this principle, btw). In the US, most mineral rights belong to the lucky owner of the land. AFAIK in the Exxon case, the state of Alabama owned the land whose mineral had been leased to Exxon. It was proved that Exxon was systematically underpaying the state for agreed-upon royalties.
- magoghm 17y agoYou are right. This is a very slanted article. The new Pemex CEO has been accused of being involved in 30 illegal contracts when he was Pemex's Finance Director. For those of you who read spanish: http://sdpnoticias.com/sdp/contenido/2009/09/07/484841 http://sdpnoticias.com/sdp/contenido/2009/09/07/484841 The main problem with Pemex is that the Federal Government has "stolen" most of the profits. I am against state owned companies, but in this case I know that the real reason behind the push for privatization is to allow some politicians and their friends to keep on stealing money from Pemex while they reduce the danger of being unmasked (it is practically impossible to audit a large organization where some parts are government owned while other parts are owned by private international corporations).