Sunday, January 17, 2016

Russia's 2 Oil Giants Diverging -Julianne Swaykus 6

     The two major oil companies, Rosneft OJSC and Lukoil PJSC, decided to diverge into one big company. "As the price of a barrel of crude falls below $30 for the first time in 12 years, the sustainability of Russia’s biggest corporate debt burden at Rosneft is coming under more scrutiny." Although these two companies are grappling with the lowest crude prices in more than a decade, Rosneft's debt is 1.5 debt times its cash flow while Lukoil’s ratio is 0.71. 
     I connected this event with the monopolies in the Gilded Age. Many robber barons were trying to join companies in order to make their business expand. Many of these robber barons were renown figures such as John D. Rockefeller who were very successful for a while, until the Sherman Anti-Trust Act was established. 

http://www.bloomberg.com/news/articles/2016-01-17/russia-s-two-oil-giants-diverge-in-bond-market-amid-sub-30-oil

1 comment:

  1. This is the horizontal integration method, where a company acquires production for outputs which are alike.

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