Mixed success for energy giants from Putin’s visit to Beijing

Xi Jinping and Vladimir Putin Beijing 0915Russian President Vladimir Putin’s visit to Beijing for the World War 2 anniversary celebrations was only a qualified success, and failed to help Novatek secure Chinese financing for the $27bn Yamal LNG project that it is working on with Total and CNPC. Co-owned by Gennady Timchenko, Novatek was shut out from Western financing when the United States imposed sanctions on Putin’s close ally who previously predicted that China would lend up to $20bn for the project.
Gazprom also came back empty-handed from Beijing where it was said to have been hoping to secure funding for a gas pipeline to China via Russia’s Altai region.
Rosneft appears to have had more success and has agreed to work with Sinopec on the the development of Russia’s Russkoye and Yurubcheno-Tokhomskoye fields.
The agreement gives Sinopec the right to acquire a 49% stake in the East Siberian Oil and Gas Company and Tyumenneftegaz, which hold the respective exploration licences for the two fields. Rosneft and Sinopec will now set up a joint technical group to finalize the investment plan and terms of the agreement.