Russia’s decision to give China a share of prized Arctic exploration licenses as part of a “breakthrough” deal signals how the world’s largest oil and gas producer and the biggest energy consumer are redrawing the global energy map.
Under agreements signed during President Xi Jinping’s first state trip abroad, China may double oil imports from state-run OAO Rosneft (ROSN) to more than 620,000 barrels a day, challenging Germany as the biggest buyer of Russian crude. The two also plan to sign an agreement this year to build a pipeline to ship Russian gas to China.
n return, China National Petroleum Corp. (CNPZ) will join with Rosneft in exploring three offshore Arctic areas for oil, the first such deal Russia has signed with an Asian company. The ocean north of Russia is considered one of the world’s largest unexplored oil provinces, and Exxon Mobil Corp. (XOM), Italy’s Eni SpA (ENI) and Norway’s Statoil ASA (STL) have already agreed to help finance drilling.
Germany was the biggest customer of Russian crude in 2011, buying about 700,000 barrels a day, according to the U.S. Energy Information Administration. China ranked fourth behind the Netherlands and Poland.
The deal with CNPC to drill in three areas of the Pechora and Barents Seas is another example of the growing clout of China’s biggest oil company, which was also offered eight onshore blocks in Russia.
Full article: Russia Lets China Into Arctic Rush as Energy Giants Embrace (Bloomberg)