Two huge U.S. companies are hoping to broaden their global footprints by investing abroad to meet the world’s burgeoning energy needs, especially those in emerging markets.
The investment arm of GE is looking for renewable energy investment opportunities in India, South East Asia, Latin America, Turkey, and the Middle East, where it plans to pour $5 billion into small expanding power firms and independent power producers by the end of 2010.
"Building on our international experience dating back to the mid-1990s, we are rapidly broadening our global footprint to propel GE’s growth and help meet the world’s deepening infrastructure needs, particularly in emerging markets,” Energy Financial Services President Alex Urquhart commented.
The company will also buy stakes in large regional companies and multi-nationals as part of its strategy for boosting international revenues, which are now about 25 percent of its overall revenues — a significant boost from its traditional level of 10 percent.
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The action supports GE’s strategy of cashing in on world primary energy demands, which the International Energy Administration (IEA) projects will grow by 55 percent between 2005 and 2030 to 17.7 billion metric tons of oil equivalent.
GE reported that international revenues topped 50 percent — 10 percent above its historic average — for the first time last year.
Not wanting to be left out of energy markets defined by rising demand and skyrocketing prices, Chevron plans to develop multibillion-dollar natural gas projects in Asia.
"The Asia-Pacific region is projected to become the largest consumer of oil and gas,” Chevron Asia Pacific President Jim Blackwell says. "If the 20th century was the age of oil, then the 21st century is poised to become the age of natural gas.”
The company expects its Platong gas project will increase its daily processing capacity in the Gulf of Thailand by 420 million cubic feet, 11.9 million cubic meters.
The IEA forecasts that liquefied natural gas demand will more than double to 400 million tons a year by 2015, driven by Asian economic growth and the demand for clean burning fuels.
Chevron and GE are hardly alone in increasing offshore capital moves: Investments by overseas companies in China alone rose to $6.93 billion last month from a year earlier, climbing 75.19 percent $18.13 billion in the first two months of the year.
Even U.S. companies not developing new energy resources are benefiting from the push.
Caterpillar, the world's largest maker of bulldozers and excavators, recently hiked its sales forecast for 2010 by 20 percent to $60 billion, largely because of emerging markets’ infrastructure needs.
The increase represents a 33 percent jump from last year. The company has almost doubled sales since 2003 on demand from markets such as China, Russia, and South Africa, and plans to spend $2.3 billion to increase capacity.
"We've got crumbling bridges and roads here in North America, and we're going to have to spend significantly to fix that,” Caterpillar CEO Jim Owens told Bloomberg. "But the emerging markets are building from the ground up."
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