FDI in Venezuela's Petroleum Industry Essay Example | Topics and Well Written Essays - 750 words

FDI in Venezuela's Petroleum Industry - Essay Example At times governmental institutions make decisions based on erroneous information. Venezuela believed in the 1970’s and 1980’s closing the market of its petroleum industry was the best course of action. The governmental nationalism of the industry impeded access to foreign investors. Nationalism refers to the devotion to the interest or culture of one nation (Answer, 2009). A commodity in reality should not be categorized in that manner. Venezuelan made major changes after 1991 to revive its petroleum industry. The topics covered in the answers of the case study provide an analysis of the changes that occurred in the Venezuelan petroleum industry during the past 20 years. 1.In 1976 the Venezuelan government made the decision of nationalizing its oil industry in an attempt to keep this valuable resource away from the hands of greedy foreign oil companies. The plan seemed like a good noble idea at the time, but the reality was that the country made a serious error of judgment. The idea was to save the natural resource so that the Venezuelan people could reap the benefits of having its own crude oil for domestic purposes. The naive and inexperienced management team at the petroleum plant was so incompetent that they failed to develop new oil fields to replace the depletion of existing reserves. Venezuela thought it could become richer by running the operation themselves and keeping complete control. The idea that by keeping foreigners away from the oil would benefit the people of Venezuela the most was a nationalist egocentrism mentality that doomed the Venezuela oil industry.