China and India Establish “Oil Buyers’ Club” to Counter OPEC

 

On June 11, major Chinese and Indian oil companies started a formal meeting in Beijing, discussing the establishment of an “oil buyers’ club” to negotiate better prices with OPEC countries. The chairman of China’s biggest energy company China National Petroleum Corporation (CNPC), Wang Yilin, and the chairman of refiner Indian Oil Corporation both attended the meeting. According to the India Times, the two largest energy consumers together accounted for almost 17% of world oil consumption last year. Should this “oil buyers’ club” become a reality, New Delhi, and Beijing will have greater leverage to negotiate with OPEC about oil prices and will also have a significant say in matters such as importing more crude oil from the US.

China intends to oust dollar from oil trade

China is planning to launch its own oil benchmark in October, similar to Brent and WTI, striving for a more important role in establishing crude prices. Unlike the Western benchmarks, the Chinese contracts will be nominated in the yuan, not the US dollar.

Shanghai International Energy Exchange sent a draft futures contract to market players in August, Reuters reported quoting sources.

Russia, China to sign government agreement on gas supplies via eastern route

Russia’s gas producer Gazprom and China National Petroleum Corporation agreed in May that Russia will supply China with 38 billion cubic meters of gas starting from 2018-2019

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The intergovernmental agreement to seal the deal to supply Russian natural gas to China via an eastern route will be signed during a meeting of the two countries’ prime ministers, Dmitry Medvedev and Li Keqiang, in Moscow, the source said.

Conflict over Natural Resources

BERLIN/LIMA (Own report) – The Catholic relief organization Misereor is sharply criticizing the new “Raw Materials Partnership” accord, concluded between the Federal Republic of Germany and Peru. Misereor writes that it fears “an aggravation” of the already growing “social conflicts developing around mining projects” in this South American country. This recently signed raw materials treaty grants German companies privileged access to Peru’s resources. The German government has now “signaled the Peruvian government” that “the expansion of the raw materials sector takes priority” over social and ecological regulations affecting that sector. The “raw materials partnership” is one of the measures Berlin is implementing within the framework of its “raw materials strategy” adopted in 2010, to be able to stand its ground in the global competition for access to the most important natural resources – particularly in relationship to China. Peru is an important source of metallic raw materials for Germany. The guarantee of raw materials is more important to Berlin than Misereor’s misgivings.

Russia’s Gazprom Ready to Use Yuan, Rubles in Accounting with China, Sees No Risk

MOSCOW, June 26 (RIA Novosti) – Russia’s energy giant Gazprom says it sees no risk in using the Chinese yuan or the Russian ruble in accounting practices with Chinese companies, the company’s head of finance and economics, Andrei Kruglov, said Thursday.

“In regard to using the yuan or rubles in accounting, we are basically ready for that, we think that this is completely normal. There are no risks for Gazprom, except for minor transaction expenses,” Andrei Kruglov said.

China pivot fuels Eurasian century

A specter is haunting Washington, an unnerving vision of a Sino-Russian alliance wedded to an expansive symbiosis of trade and commerce across much of the Eurasian land mass – at the expense of the United States.

And no wonder Washington is anxious. That alliance is already a done deal in a variety of ways: through the BRICS group of emerging powers (Brazil, Russia, India, China, and South Africa); at the Shanghai Cooperation Organization, the Asian counterweight to the North Atlantic Treaty Organization; inside the Group of 20; and via the 120-member-nation Non-Aligned Movement (NAM).

Trade and commerce are just part of the future bargain. Synergies in the development of new military technologies beckon as well. After Russia’s Star Wars-style, ultra-sophisticated S-500 air defense anti-missile system comes online in 2018, Beijing is sure to want a version of it. Meanwhile, Russia is about to sell dozens of state-of-the-art Sukhoi Su-35 jet fighters to the Chinese as Beijing and Moscow move to seal an aviation-industrial partnership.

China Prepares Massive Investments in Crimea

China intends to invest in massive projects in Crimea less than a month after the former Ukrainian province was annexed by the Russian Federation.

Vladimir Chizhov, Russia’s ambassador to the European Union, said Russia is partnering with China in two major Crimean projects:  the “Power of Siberia” gas pipeline and a 25 meter deep Crimean deep water port. These projects will continue despite the ongoing crisis in the Ukraine, Chizhov said.

Chizhov described the “Power of Siberia” gas pipeline as a mega-project that will pump 60 billion cubic meters of gas annually from the Kovykta and Tchayandinskoe gas fields to Russia’s far east, where a branch line will deliver 38 billion cubic meters a year to China.

China took away the Turkmenistan – Afghanistan – Pakistan – India pipeline from USA

“With a subtle motion of the hand” China took away the Turkmenistan – Afghanistan – Pakistan – India (TAPI) pipeline project from USA and became yesterday the chief controller of gas resources in Central and South Asia.

Somebody else’s ideas and plans have been expropriated by means of contract for sale of 25 bn cu m of gas per year concluded between State Concern Turkmengas and Chinese Company CNPC.  The deal will increase the total volume of Turkmen gas supplied to China up to 65 bn cu m. At the same time the agreement is achieved on the planned new direction of Turkmenistan – China pipeline (D direction) for additional supplies.

China’s Strategy in Afghanistan

Beijing is keen to increase its involvement in the country following the planned U.S. withdrawal in 2014. But security problems may interfere.

For a relatively small drilling operation, China National Petroleum Corporation’s (CNPC) project in Afghanistan’s Sar-e-Pul province has a large footprint. Several layers of fences and containers serving as blast walls surround the extraction site, which includes dormitories, an office complex and various security structures. Throughout the day, trucks ferry in equipment and more containers. On the outside, the faces are all Afghan, but CNPC’s logo and bright red Chinese slogans are impossible to miss.