Tempting fate, Gazprom shares started trading on the main Moscow stock exchange, RTS on Friday the 13th of January. The once wholly state-owned business immediately hit a market capitalisation of $US200 billion.
Of greater interest than the market value of the company which has received many favours from Russia’s president, Vladimir Putin, was the fact that at $US200 billion, Gazprom instantly ranked as the world’s eighth biggest stock exchange-listed business, and the fourth biggest oil company.
Compounding this picture of size were comments from Gazprom chief executive, Alexei Miller, that he is confident that it will take less than a year for the Russian company to rise to second spot in the oil sector pecking order.
To do that, Gazprom must first pass Shell (valued at $US223 billion last week), and BP ($US248 billion).
The top dog remains ExxonMobil at $US375 billion – but it wouldn’t surprise The Slug if Gazprom secretly has Exxon in its sights, especially if Vlad and his mates in the Kremlin continue to do a few favours, such as the deal last August when the oil producer, Sibneft mysteriously made its way into the Gazprom stable.
The rise and rise of Gazprom, complete with all the political intrigue behind the business, and the way in which it is being used as a blunt instrument by Vlad to bash a few former members of the old Soviet Union into paying higher prices for gas, is one of the great corporate stories of the past few decades.
While the Russians can be a little rough in the way they play business and politics, I suspect the West will learn to overlook these quirks and even develop a fondness for the Russians.
Looking ahead, it is possible to see the Russians becoming critically important to the rest of the world, especially the West, as troubles continue to boil up in all the usual places.
If it isn’t bombs in Iraq or kidnappings in Nigeria, then it’s crazy clerics in Iran who want a nuclear bomb to obliterate Israel. All of these factors have served to destabilise the oil industry, if not the entire world economy.
That is why The Slug believes that Friday, January 13th, might go down as the day that the rest of the world looked at the listing of Gazprom on RTS and said, ‘Thank goodness the Russians are coming’.
Such a thought, for oldtimers out there, instantly brings back memories of that 1966 movie, ‘The Russians are Coming, The Russians are Coming’, a comedy in which a Russian submarine runs aground in the northeastern US leading to a series of confrontations with the locals, before they all part the best of friends.
In real life we now have a situation similar to the movie in which the Russians, initially seen as the enemy, are increasingly becoming so important that they must become friends because they have the oil the west so desperately needs.
On the flipside of that situation there is also little doubt that the Russians would far prefer to be doing business with the west than the horribly destabilised Islamic region to their south, or China to the southeast where old enmities date back centuries.
The Slug also believes it is deeply significant that Gazprom wants to be seen as a rival to Shell, BP and ExxonMobil for an even more basic reason – it wants to be just like them, it wants to be openly traded on stock exchanges around the world, and it wants to be treated as an equal (albeit an equal with a president in its pocket).
The Gazprom view of the world is totally different to the state-controlled view of government oil companies in Arab countries.
It is a view that, while different and very Russian, is much more attractive than anything else available – which is why the rest of the civilised world will grow to like the Russians, warts and all.
