Russia And China Strike A Deal

Forbes ^ | 11/2/2009 | Oxford Analytica

[bruinbirdman]

China interested in Russian hydrocarbons; Russia aims to reduce its dependence on European energy markets.

Russian Prime Minister Vladimir Putin's visit to Beijing earlier this month yielded commercial deals worth $3.5 billion and a sweeping framework for bilateral energy cooperation. China's interest in Russian hydrocarbons is motivated by a desire to meet growing demand and diversify import sources. Russia stands to gain from reducing its dependence on European energy markets and using exports to China to develop Russia's Far East.

Oil integration. Earlier this year, the China Development Bank (CDB) provided Russian energy companies Rosneft and Transneft with a $25 billion loan with preferential interest rates in exchange for a 20-year oil supply contract under ostensibly attractive price conditions. Russian officials estimate that the total value of oil deals signed with Chinese companies this year might reach $100 billion, and hope that the first deliveries of Russian oil will start by the end of 2009.

Although the $25 billion package was the largest energy deal Moscow and Beijing have concluded to date, it was not the first. In December 2004, China National Petroleum Corporation (CNPC) provided Rosneft with a $6 billion loan in exchange for a long-term oil supply contract. This loan indirectly helped Rosneft acquire Yuganskneftegaz, Yukos' main production unit and the backbone of Rosneft's upstream assets. Later, CNPC purchased about $500 million worth of Rosneft's shares in its July 2006 initial public offering.

Refining and distribution. According to the first deputy prime minister and Rosneft board chairman, Igor Sechin, the company has reached an agreement with CNPC to build a joint refinery in Tianjin, south of Beijing. The two companies are also planning to build 300-500 petrol stations in China. These agreements are quite important for Rosneft, as oil refined and distributed through the company's own network is

[bruinbirdman]

Perhaps the Rooskies and ChiComs can do a barter deal that will avoid the fact that both their currencies are worth squat.

[nathanbedford]

Do you think that it is each other's currencies which they covet?

[DontTreadOnMe2009]

No need for F-22s to defend us from these totalitarian states ... right?

Thanks McCain and Thanks Big 0 ....... ya dangerous jerks.

787 BILLION $$$ for banks and not ONE $ for F-22 stealth fighters.... the finest fighter jet in the world, made in USA!!!

Kinda sounds like a campaign slogan doesn’t it???

Billions for banks, not one penny for Fighter Jets!!!

What a long long way we are from whence we came.