Page 11 - BNE_magazine_12_2019 dec19

bne December 2019 Companies & Markets I 11
The secrecy surrounding the share swings of Surgut reflects the general opacity of the company.
Since the consolidation and privatisation of state oil assets in western Siberia in the early 1990s, Surgut has been headed by Vladimir Bogdanov.
Bogdanov is regarded as something of a sector "dinosaur" by his rivals for his shunning of western debt, technology, accounting standards, foreign partnerships and Moscow as he largely lives on the site of the oilfields. The head of Surgut is believed to have close ties to the Kremlin.
Activist investor and the Kremlin’s nemesis, Bill Browder,
told bne IntelliNews that it was Surgut that organised
the cancellation of his visa after he published a detailed organisation diagram of the company’s shareholding structure. The accusation was made that one of the hundreds of shell companies shown on the diagram belongs to Russian president Vladimir Putin personally.
The shares of Russia's fourth largest oil producer Surgutneftegaz leaped by a third on October 23 in the second big jump in valuation this year.
Norilsk Nickel target price upped by
a quarter as climate crisis to send the cost of nickel and palladium soaring from 2020
Ben Aris in Berlin
Analysts at VTB Capital (VTBC) have increased the target price of Norilsk Nickel (NorNik) shares by a quarter (25%) in anticipation of a spike in the prices for nickel, palladium and other platinum group metals (PGM) next year as countries around the world scramble to cut CO2 emissions in what is shaping up to be a super-climate year.
“There is a widening gap between global emission targets
and reality,” VTBC said in a note. “We believe that in order
to catch up with targets, the industry will have to accelerate electric vehicle (EV) adoption as well as significantly increase palladium loadings in petrol internal combustion engine (ICE) cars. This would drive demand for palladium, nickel and copper up further, just as inventories of all three are low.”
NorNik is the biggest producer in the world of nickel and PGM metals that are essential components in catalytic converters that reduce the amount of CO2 cars produce as exhaust fumes. With ever stricter limits on the amount of CO2 a car can produce, the role of the PGMs has become ever more important.
The metals are also used in battery production so demand for
nickel and PGMs is only set to increase as the effort to cut CO2 is expected to climb, but the stocks of these metals is already low.
“Supply response or substitution will take years to materialise, we believe. We raise our 12-month Target Price for Norilsk Nickel 25% to $34, as we expect the company to enjoy higher
“There is a widening gap between global emission targets
and reality”
prices supplying this disrupted market. As this implies an estimated total return (ETR) of 37%, we reiterate our Buy,” VTBC said in a note. NorNik shares were trading at $24.90 on November 15.
Next year will be crunch time for the planet. The world has to reach peak CO2 production next year and the levels of CO2 have to start falling in 2020 if a global climate disaster is going
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