Exxon Mobiles come to an oil rich country, and then they carry out exploration and make sharing...?

contract with the country. Do you think it is good for the interest of the peope of that country? What is the good option in your opinion? I think for the people to get most benefits of their resources is by having relationship in which they will become the employer and exxon mobile is the employee?


Do you agree?Exxon Mobiles come to an oil rich country, and then they carry out exploration and make sharing...?
Ideally, YES -- at least a very highly-paid employee or agent.





Economic and political realities, though, usually prevent such a scenario from happening. For one, smaller poorer countries often do not have the resources or expertise necessary for oil exploration, assessment, processing, and distribution. Yes, Exxon alone is bigger in asset size or sales than a LOT of smaller, poorer countries.





Also, if a country would have to invest in the infrastructure necessary to undertake its own exploration, assessment, etc. it would have to process and deliver a whole lot of oil to recover its capital investment. If it were only a smallish amount of oil reserves and with a lesser ability to undertake exploration ventures with other countries (since they would then be competitors), then the investment costs may outweigh the benefits.





Mexico in the 1980's-ish, for instance, tried to do just that, with disastrous results especially in the 1990's oil glut which drove the price of oil down on top of production that was not within the economies of scale and interest rates that were going through the roof.





The good news is that as the price of oil goes higher, the more likely it would be for such an undertaking to be profitable. I guess we just haven't reached that point yet.