Gazprom Looks Toward Israel (RSX, RBL)
The world’s biggest gas company is “carefully” looking at opportunities to expand into Israel in order to continue growing out its global distribution network.
Gazprom (OGZPY), a bellwether of the Russian market for U.S. investors and, indeed, the entire world, has stepped up its rhetoric about launching a joint venture in Israel to exploit its potentially rich offshore natural gas resources.
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The partnership would involve OGZPY buying a 50% stake in the private Israeli company that currently holds the rights to develop the country’s offshore energy assets.
With several OGZPY officials from deputy CEO Alexander Medvedev on down — not to mention Russia’s deputy prime minister — weighing in on the opportunity in recent days, this is not just market speculation but an active topic of corporate negotiation. In fact, a deal could materialize before the end of the year.
The deal could both develop the offshore assets and create a distribution network to deliver them to customers throughout Israel and elsewhere in the region.
Since OGZPY is so heavily weighted in the Moscow market — its shares account for roughly 45% of the entire Russian market capitalization — any positive developments could translate into good things for broader portfolios like the Market Vectors Russia ETF (NYSE:RSX) and the SPDR S&P Russia (NYSE:RBL).
Written By Tim Seymour From Emerging Money
Emerging Money provides insightful and timely information about the increasingly important world of Emerging Market investments. CNBC Emerging Markets Contributor Tim Seymour leads the team of Emerging Money to bring you cutting edge global news and analysis.
About Tim Seymour: Tim is a founder of Emerging Money. He is a founder and Managing Partner at Seygem Asset Management, and The Emerging Markets Contributor to CNBC. Seygem Asset Management focuses on investing throughout the global emerging markets asset class. With a view that emerging and developing economies will continue to outpace the economic growth and advancement of developed economies, Seymour has devoted a career to investing in the dominant markets of tomorrow, today. Seymour’s career has included significant experience in both alternative asset management (hedge funds) and capital markets, having launched two hedge funds, and built the largest Russian broker dealer in the USA. Seymour started his career at UBS, focusing on international credit (cash, swaps, forex) in a specialized hedge fund group (New York). Seymour completed the firm’s training program after graduating with an MBA in international finance from Fordham University. Seymour received his undergraduate degree at Georgetown University.
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