Russia and China strengthen oil and gas deals

Chinese and Russian oil companies signed several deals during the recent Asia Pacific Economic Cooperation annual meeting in Beijing, indicating that the two countries have entered a honeymoon period in the area of energy cooperation, Guangzhou’s 21st Century Business Herald reports.

China National Petroleum Corp (CNPC) signed framework deals with Russian oil company Rosneft and gas supplier Gazprom Nov. 9 for buying a stake in an oilfield in Russia and in gas supplies.

The deals came as Moscow saw a further drop in oil prices and in its currency, the rouble, since July, which has hurt the Russian economy, the newspaper noted.

This is why China and Russia entered a new agreement on the west gas route in November, soon after a deal on the east route was signed in May, said an oil industry expert.

Under the new framework agreement, Gazprom will supply China with 30 billion cubic meters of gas through the west route every year, at prices more competitive than the gas China purchases from Central Asia, according to Gazprom CEO Alexei Miller.

On the other hand, Rosneft signed a framework agreement, offering the Chinese company a 10% stake in Russia’s second-largest oil field in Vankor, eastern Siberia.

This was a surprising move on Russia’s part, the expert said, since President Vladimir Putin has banned private or foreign ownership in the oil sector after Yukos was nationalized.

Russian energy minister Alexander Novak also said Nov. 10 that his country is considering the possibility of changing the currency in oil contracts to the rouble, the newspaper stated.

Full article: Russia and China strengthen oil and gas deals (Want China Times)

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