The Wall Street Journal reported on October 9, 2006 on page A12 today that Russian mining company Norilsk Nickel more than doubled its profits in the first half of 2006. The company's stock closed at $128.50 per share on Thursday, and Norilsk Nickel plans to buy back a billion dollars worth of its own stock at $131 per share. Shareholders will also be rewarded with a dividend of 56 rubles ($2.07) per share for the first nine months of 2006. The International Herald Tribune has the full story here. Norilsk Nickel is one of a basket of Russian companies traded on the New York Stock Exchange (NYSE), AMEX, the London Stock Exchange, and the technology-weighted Nasdaq index (NN's holdings include key metals for semiconductors).
In other Russian business news from the weekend, LukOil President Vagit Alekperov announced that his company would invest $100 billion dollars to develop new oil and gas production. The ten year development plan will be presented to investors in New York on October 19. Alekperov vowed to acquire refining capacity in the U.S. and other key markets, adding that the company could boost earnings by $3.5 billion by making gasoline instead of just selling crude. Lukoil is also turning many of its drilling and shipping units over to contractors to emphasize its core business of pumping and transporting oil. The IHT again has the story.
Vagit Alekperov, CEO of Lukoil
While the Associated Press lists Russia currently as the world's second largest oil producer, the country's production surpassed Saudi Arabia's during the peak summer production/consumption months. The New York Sun writer Yousef Ibrahim can't decide if Russia taking market share away from the OPEC countries is a good or bad thing, though the article headline proclaims "Freedom from Saudi Oil". Not quite yet - according to the U.S. Energy Information Agency, America still imports a million barrels a day from the Saudi Kingdom, or 5% of our daily consumption. Mr. Ibrahim settles for saying the world oil market is now enjoying "atheist" instead of "Wahhabi" leadership, throwing a bone to NY Sun readers nostalgiac for the good old Evil Empire.
As Russia's oil infrastructure is far more dispersed than oil facilities in Saudi Arabia, and Russian tankers do not cruise through the Straits of Hormuz past Iran's cruise missiles, I'd say this means more energy security for the world. The question is whether U.S. pundits can stop thinking in zero sum terms and start viewing energy diversification outside the Middle East - for us, China, India, and our allies - as in everyone's best interest.
Mining town in Siberia