China and Russia strengthen their cooperation in energy sector - experts

Almaty. January 14. Silkroadnews – “Chairman of the Board of the Chinese corporation Sinopec Wang Yuypu and CEO of “Rosneft” Igor Sechin signed a framework agreement on joint development of the Russian and Yurubcheno-Tokhomskoye oil deposits”, the newspaper “People’s Daily” informs.
The agreement provides that Sinopec will be entitled to purchase 49% stake in two Russian oil companies that belong to “Rosneft” - the Eastern-Siberian Oil and Gas Company and the Tyumen Oil and Gas Company. These two companies have licenses to develop the Russian and Yurubcheno-Tokhomskoye fields respectively.
According to information available, “Rosneft” and Sinopec do already have an experience of cooperation in the establishment of joint ventures to develop the oil and gas fields. In the past the parties used to develop “Sakhalin-3” oil and gas project in Udmurtia. Currently “Udmurt Oil Company” operates quite successfully, being a joint project of “Rosneft” and Sinopec with China holding a 49% stake.
As a next step the parties will establish a joint technical working group to determine the final investment plan and text of the agreement. The end result of the transaction will depend on a number of standard conditions, approval by the national agencies as appropriate, etc., the newspaper said.
According to analysts, “a form of cooperation between two companies builds the mutual trust, opens the advantages of cooperation and also forms the foundation for future cooperation projects”. They also add “considering the situation fundamentally there are mutual needs between China and Russia, China is interested in the crude oil resources, while Russia needs the capital and market of China”.
“The present situation at the crude oil market is not that favorable, beneficial international conditions do promote the agreement achievement. Mutual purchase of shares serves to strengthen the cooperation in the field of crude oil, assures the cooperation mechanisms”, said the researcher at the Institute of Industrial Economics of the Chinese Academy of Social Sciences, head of energy economy research department, Zhu Tong.