Most of us are geography centric and that is a very good thing. Where we live is what we are most concerned about and then it spreads to a region within a couple hours of driving and within a few hours of flying. The world can be travelled, but most of us most of the time will be in a small part of it. When you are investing, many of your first choices will be products and services you use. For example, if you were going to buy a telecommunication company you likely will examine which company you pay a bill to. You can choose others, but you will have a bias and that is normal. Often outside of your scope the national government determines a policy which may or may not have a direct affect on you, but it tends to make you aware of it. For example, the war in Ukraine and Russia.

In an article by Geoffrey York of the Globe and Mail, the backstory is the western governments including Europe and the US imposed sanctions on the economy of Russia. The idea was to make the economy less active and have internal dissent among the Russian people – is the war worth it? When sanctions are imposed, countries have to find alternatives and it is always possible, but they tend to be more expensive and takes time to change the logistics.

One method is to form new alliances, in the case of Russia one group is called BRICS meaning Brazil, Russia, India, China and South Africa. It is noted the countries are not limited to only working with each other, but if the western governments impose their will, the countries have an alternative. In the case of Russia, their main source of income is oil and gas, Europe cut off most of their exports now oil and gas goes to India, China and South Africa. The cabinet of South Africa approved state owned Gazpombank (Gazpro) to be the preferred investor in a mothballed refinery on its southern coast. Media reports there were other bidders, but 19 were disqualified for technicalities or the process was rigged towards Gazpro. The rules after the bids came in were changed to criteria the bidder received extra points for being majority owned by an oil and gas producing state.

The refinery is a 45,000 barrel-a-day gas to liquids refinery at Mossel Bay. The deal was recommended by South Africa’s state-owned oil company PetroSA. In 2019 and 2020, French oil company TotalEnergies discovered gas offshore of South Africa.

In Washington, the state department said the deal could provoke US lawmakers to expel South Africa from preferential trade access agreements. However, it was the South African cabinet which made the decision and likely they considered the response.

Linking to dividend paying stocks, often times you will buy into a stock for many different reasons and then governments around the world will do things in their interests. It is nice if the government interests and the corporate interests align and that makes the marketplace much easier, but there are many different agendas in the global world. It is a reason most of us are bias towards our geographic part of the world. If you wish you can test it, if you have family members living on one coast or the other, ask them which provider would you invest in? Sometimes their answer is actually the better one.

There are more questions than answers, till the next time – to raising questions.