News in the German papers yesterday that you guys are wobbling about whether to sell Basell the, polyolefins joint venture to Iran's NPC, doesn't come as a surprise, what with German Competence and Anglo-Dutch Scenario Planning. Your managements are prone to examine things to death and beyond. It has to be said, this process serves you well.
You might be worried about share price effects of selling out Basell to NPC, compared to Ineos or the Haldia consortium.
But, guys, long term shareholder value has been your mantra and should continue to be.And OK, Birds in the hand (or cash in the bank) and all that...
But, a gentleman can never have too many waistcoats and a lady can never have too many handbags. On that basis I humbly suggest neither Shell or BASF can never have too many friends sitting on piles of natural gas, now or in the forseeable future.
Some companies like Shell, decide that cracker plus one is the strategy of choice. Others like Innovene, the soon to be spun out company from BP Chemicals, prefer cracker plus some, since they’re only taking the olefins and derivatives businesses with them.
BASF on the other hand, thinks life begins with gas and is becoming an integrated chemicals and energy company, faster than you can say ‘main chance’.
Today’s ‘trailblazing’ memorandum of understanding with Gazprom, witnessed by both Putin and Schroder, for added gravitas, and possibly security, reinforces BASF’s position as one of the most strategically enterprising chemicals companies around.
It gains access to a gas field that could supply Germany for five years, it gains almost half of the company exploiting the gas, a founding 50% stake in the pipeline and “equal rights in Russia” for the first time, according to Alexey Miller, Gazprom president.
The proof of the equal rights would be in the tasting. But Alexey and Jurgen get on so well, and the companies have for 30 years it won’t come to litigation. Ever. And Yukos won’t need to stand as a warning on the fickleness of power in Russia.
