Nationalization could cut oil output: US

By Ben Berkowitz

NEW YORK (Reuters) - Growing moves by oil-producing countries to nationalize resources could hamper worldwide oil production, but the United States is not concerned about the potential loss of Venezuelan and Iranian oil supplies among others, U.S. Energy Secretary Sam Bodman said on Tuesday.

In a wide-ranging interview at the Reuters Global Energy Summit in New York, Bodman said moves like those being made in Latin America to change contracts or expropriate fields would discourage investment.

"In the past, when we have had reactions of this kind, you get people to go to court. Going to court is not a very good substitute for drilling wells if you're looking at the absolute numbers," Bodman said.

While Bodman acknowledged that relations between the United States and OPEC member Venezuela were frayed, he said the United States was among Venezuela's most natural oil customers, making a cut-off unlikely and not a serious problem in any event.

"I don't think it would hurt us materially, no," Bodman said, if Venezuela, the world's No. 5 oil exporter, did stop exporting to the United States.

Bodman's comments echoed those of others in the global oil community on the right of oil-producing nations to renegotiate contracts while preserving free markets.

"You can try to renegotiate some contracts to ensure profits from some very high prices are fairly shared between the owner, that's the country, and the companies," IEA Executive Director Claude Mandil told the Reuters Energy Summit.

"You can do that, but you should not do it too much," Mandil said.  Continued...