Energy assets
If you ever wonder where the money is in this world, look no further than companies devoted to feeding power to an energy-starved planet.
Bloomberg reported today that Gazprom -- a state-run Russian gas producer -- shot ahead of China Mobile (a company with more customers than the United States has people) and the venerable General Electric to become the world's third-biggest company, valued at $340 billion.
The top two? Oil behemoths Exxon Mobil, with assets of $476 billion, and PetroChina ($441 billion) top the list.
Despite rosy talk of a world powered by the wind, sun and corn, the leaders of these companies are expecting the industry's fantastic growth rate to continue.
Gazprom's deputy CEO, Alexander Medvedev, said he expects the nationalized company to reach a staggering $1 trillion market value in just six years. For the next month, the chairman of the company is none other than Dmitry Medvedev -- no relation -- who this week officially became Russia's third and youngest president. He plans to step down from his position at the gas giant next month.
"In the era of scarce global natural resources, companies with significant reserves access are going to end up among the most valuable in the world," analyst Steven Dashevsky said from Moscow.
American's lone entry into the Top 5, General Electric, last month announced troubling news. The diverse company, the world's largest producer of jet engines and locomotives, announced last month that earnings will fall far short of initial 2008 projections -- and instituted a new cost-cutting plan designed to trim expenses and sell divisions not performing to expectations.
As Americans watch their 401(k) investments suffer through the latest market downturn, it is troubling that even a bastion of the U.S. economy such as General Electric seems to be flagging and off-course.
When he founded GE in 1878, one wonders if Thomas Edison could have imagined just how many light bulbs would need power each and every minute. Or that his revolutionary company someday would lose out to competitors in Russia and China.
Editorial by Ron Fields
