Russia's gamechanger oil deal with China
Russia and China have agreed the biggest oil deals ever. The deal reportedly commits Rosneft to supply 300,000 barrels per day to China for 25 years. It was put together by Mr Igor Sechin, Rosneft’s chairman.
According to media reports Rosneft would recieve a $60billion upfront payment. Mr Sechin says “this is one of the elements of the deal”.
”Without any exaggeration a large-scale contract has been prepared by Rosneft,” President Vladimir Putin said after a meeting on Thursday with China’s Vice-Premier, Zhang Gaoli. Supplies to China are expected to reach ”volumes of hundreds of millions of tonnes of oil, in total worth more than $US60 billion”, Mr Putin further stated, though he provided no more details about the contract.
Currently, Russia exports about a fifth of its oil output to Asia. It pipes oil directly to China after a trans-Siberian pipeline was completed in 2010.
Mr Putin told Mr Zhang that he hoped two Russian gas companies, Gazprom and Novatek, would similarly strike deals to export energy to China. Energy analysts said Rosneft had also been negotiating with Chinese companies to form joint ventures to drill in the Russian sector of the Arctic Ocean above eastern Siberia, after granting similar deals to ExxonMobil, Eni of Italy and Norwegian oil company Statoil to drill in the Kara Sea, an inlet on the western side of the long coastline.
While the overall volume of Russia’s oil output has remained level, the country has decreased sales to recession-plagued Europe.
Russia is now the largest oil producer in the world, pumping about 10 million barrels a day. Russia has continued to shift its energy exports from west to east and It currently exports around 750,000 bpd to the region.