B.R.I.C. BUILDING

Brazil, Russia, India, China pass U.S. in energy industry
Edith M. Lederer, July 1, 2007 (AP via Lincoln, Nebraska, Journal-Star)

WHO
Brazil (B), Russia (R), India (I), China (C); Anthony Ling, managing director, Goldman Sachs
BRIC: Brazil, Russia, India, China--the new force in world energy (click to enlarge)

WHAT
A new Goldman Sachs study says the 4 countries of BRIC now dominate global energy, replacing the U.S., and will continue to grow in dominance.

WHEN
- Study released 7-3.
- 1991: 55% of 20 biggest companies were U.S., 45% were European;
- 2007: 35% are BRIC, 35% European, 30% U.S.

WHERE
- BRIC already dominates metals and mining, will soon in insurance and consumer industries.
- Statements ahead of July 5-6 Geneva conference on the U.N. Global Compact.

WHY
- Mining: 20% of top 20 companies are BRIC, Insurance: 10%, Global beverage industry: 5%. Investors must get on board or get left behind.
- Exxon Mobil Corp. of Irving, Texas, is still the No. 1 energy company. Coming on strong: PetroChina Co. (China National Petroleum Corp.); OAO Gazprom, (Russian gas monopoly); Petroleo Brasileiro SA, (Petrobras -- Brazil’s oil company); Sinopec (China Petroleum & Chemical Co).; OAO Rosneft and OAO Lukoil (Russian oil producers); China National Offshore Oil Corp.; Oil & Natural Gas Corp. (India’s oil company).
What do these flags signal? Change. (graphic from Z+ Blog)

- Why the U.S. energy industry is falling: 70% of new production is coming from outside OECD, resulting in an enormous number of new projects in new areas. European and BRIC countries’ oil companies have been much less colonialist, much more inclusive, thereby growing their market share of new projects. Many American companies have been acquired. Petroleum engineers are increasing and highly sought in BRIC but decreasing in the U.S.

QUOTES
Ling: “For any company operating on a global scale, the world is changing more rapidly, more challenging than ever before — truly globalizing…[one of the significant changes is] the rise of BRIC economies…The U.S. is now lagging with the smallest percentage number of energy companies worldwide…We believe this sort of pattern will be repeated industry by industry…And it is simply accelerating.”