Chapter 17 The Great Leap Forward (1)

In early September, Contini, who had traveled around the western part of the Soviet Union, finally returned with satisfaction. Chicherin and Bukharin accompanied him throughout the whole process, giving him enough courtesy, and Contini seemed to enjoy it very much. It felt like being accompanied by a big shot. While giving instructions and scolding Fang Qiu, he inspected various industries in the Soviet Union and signed numerous economic contracts:

Nickel ore contracts, manganese ore contracts, cement contracts, timber contracts... All the minerals that Contini likes have signed purchase contracts, and they agree to offset them with patented technologies, machines and other industrial products. After careful inventory, except In addition to the initial more than 20 million US dollars, the additional purchase contracts signed by the United Group amounted to more than 20 million US dollars, but all of them were raw materials or initially processed products.

What was provided to the Soviet Union was all machinery and equipment. Zakaria, who accompanied Contini, was puzzled that the United Group did not have so much equipment to export. He was still importing complete sets from the United States and Germany. How could he Dare you agree to the Soviets? What should I do if I break the contract?

Contini laughed loudly when he found out: "Isn't it enough to import and then re-export?"

"We're going to lose money this way."

Contini smiled: "No, it might even be more economical..."

"Thrifty?" Zakaria couldn't understand the president's business philosophy. Of course, since he was an administrative secretary, it was normal for him not to understand, so he humbly asked for advice.

"First of all, we ourselves need the equipment sold to the Soviets. Do you think the unit price of buying one set is lower or the unit price of buying two sets is lower?"

Zakaria nodded.

"Secondly, we have increased our external procurement efforts. Do you think a business of US$10 million is more influential or a business of US$40 million is more influential?"

Zakaria understood: With an order of 42 million US dollars, even such a big thing in Munich and such a big mastermind can suppress it, and the influence is evident. "

"Finally, don't we still have some German rags recovered from France? After sorting them out, rectifying them, we can sell them to the Soviets as second-hand complete sets of equipment."

Zachariah was dumbfounded: "This...this..."

"Why don't we all spread it out and say it clearly? I won't lie to the Russians. Second-hand goods should be sold at second-hand prices... Anyway, second-hand goods from France, Germany, Italy, and the United States are still very popular in the Soviet Union. More importantly, Yes, I am the only one in the world who is willing to accept such a large amount of minerals and raw materials as offsets. Look at other countries, which consortium dares to accept it? He said proudly, "The honorary doctorate of Moscow University and the status of an old friend of the Russian people are not given for free. Do you think who is accompanying us on the inspection? Members of the Politburo, there are only a few Politburo members in the Soviet Union? It has to do with economics There are also political accounts to be settled!”

"Besides, it's hard to say whether this transaction will lose money in the future. At least it is making money now. The crude oil short order in the New York OTC market brought back more than 10 million U.S. dollars. As long as the reason is of course the big oil field in Algeria, but Baku Those more than 10 million barrels of crude oil were the last straw that broke the market.”

There is one sentence that Contini has not yet told him: Historically, after the 1929 crash, the prices of industrial equipment in Europe and the United States fell to outrageous levels. By then, the United Group, which has money in its hands, can go shopping and buy again. Wouldn't it be fun to sell to the Russians at the contract price and buy low and sell high?

It doesn’t matter whether you say this or not. Anyway, the previous words alone have convinced me that President Zakaria is bad at spending money, but even more bad at making money! Sure enough, the structure is different, the vision is different, and the career is different!

So, by importing so many raw materials from the Soviet Union, is the United Group going to have too much money to burn?

No!

The dredging project of the two ports of Tripoli and Benghazi has begun. Tens of thousands of German and Italian engineers, technicians and skilled workers, as well as Chinese workers of the same scale (see Chapter 5 for details), have begun to arrive in Libya, creating a scene of massive construction projects. It will unfold soon.

The first step was to build a temporary settlement. Building houses with bricks and tiles was too slow. Later generations of rapid construction site houses did not have the skills at this time. The United Group had to use American methods to customize wooden structure houses and build them quickly.

It is said that it is very suitable to build wooden houses in North Africa. Firstly, the air is dry and the temperature is high, there are few insect pests, and it prevents mildew and rot. Even if the moisture in the wood exceeds the standard, it will not cause bad consequences; secondly, the terrain is very flat, which is basically There is no need to lay a foundation. As long as you find a water source and use ready-made steel and wood structural materials, you can build a settlement in 7-10 days. It can be achieved using pure hand tools, including cranes, forklifts, excavators and other modern equipment. Of course it will be faster if you don't use it; although the ability of Sanlai wooden structure houses to withstand typhoons and hurricanes is less good, North Africa is mostly prone to sandstorms, so where do hurricanes come from? Therefore, safety is not a problem at all, and living in it will provide the effect of warmth in winter and coolness in summer; last and most important point, if these temporary residences need to be moved, they can be easily dismantled, which facilitates the reconstruction of steel bars in different places. Houses built with cement are doomed and can only watch helplessly abandoned.

When Contini took Aida back from the Black Sea, Antonio was negotiating with Standard Oil on the capital increase and share expansion of the Algerian company. According to the current production and exploration volume, the United Group proposed a price of 30 million US dollars for 10% of the shares. Standard Oil thought it was too expensive because the total value of crude oil may exceed 700 million US dollars, but after deducting the cost of infrastructure and mining, it is only worth 300-400 million US dollars at most. Once this share price is set, it obviously eliminates the subsequent appreciation space, but Antonio is unwilling to give in, believing that there is still room for further improvement in oil reserves.

The two sides were deadlocked for 5 days, and Standard Oil gave in. The exploration team found a new mining area near the border between Algeria and Libya again, increasing the recoverable volume by at least 200 million barrels. Now it is a bit late for Standard Oil to agree to the price of 30 million US dollars. Finally, Antonio knew that Contini had the intention of keeping the US power to check France, so he did not raise the price significantly, and reached an agreement at a price of 33 million US dollars, which means that the valuation of the Algerian company reached 330 million.

Eight days later, the second shocking news came out. The second largest oil company in the United States, Texas Company (later renamed Texaco), reached a shareholding agreement and invested 35 million US dollars, but only obtained 9% of the shares. Now Algeria is valued at 389 million.

As if the shocking news was not enough, the exploration team announced the discovery of a high-yield area on October 9, increasing the recoverable volume of the block obtained by the Algerian Oil Company to 1.6 billion barrels, and the prospective reserves are close to 7 billion barrels, which abruptly canceled the shareholding agreement of the Anglo-Dutch Shell Company that had been negotiated for half a day. The price that the two parties had basically agreed on was 40 million US dollars to obtain 10% of the shares after the capital increase. As a result, the vice chairman of the negotiation had to discuss with the behind-the-scenes controller. After all, it involved two important countries. The result of the discussion has not yet come out, and the news of the huge increase in reserves has spread all over the world. Antonio directly raised the price from 40 million to 50 million, and said that the British-Iranian (Lang) Oil Company also expressed interest in this.

What made the British and Dutch even more shocked was that the French also intervened at this time. The three major French banks that had invested in Union Bank stated that they would support the French Petroleum Company (later called Total) to invest in the Algerian Petroleum Company. They were so arrogant that they directly announced that they would exchange 100 million US dollars for 20% of the shares, and the valuation jumped directly to 500 million!

Are the French crazy to come out to drive up prices at this time? Obviously not, because on October 11, the United Group signed an agreement with the three major investment banks of Merrill Lynch, Lehman Brothers, and JP Morgan. The joint sponsor team formed by them escorted Union Bank and Union Petroleum (temporarily only including Algeria Company) to go public, and signed a schedule. Union Bank was to go public before mid-1927, and Union Petroleum was to go public before mid-1928. As important shareholders of Union Bank, the three major French banks found out that the Wall Street tycoons had set the IPO price for Union Petroleum at a starting valuation of 800 million US dollars! 10-15% of the shares were publicly allocated to the public.

This means that if you can buy shares now at a valuation of 500 million, the value will increase by 60% in three years. This is the IPO price. Given the current stock market boom, doubling the value is no problem at all. So the French are anxious and directly bid 100 million US dollars to grab the shares. Who knows if there will be any new oil field discoveries in the next few months? As long as there are, they can make money without doing anything.