April 22, 2011 at 10:40 am #2302
Russia Feuds With China Over Oil Price: “They Are Trying To Force Their Socialism Upon Us”
John Helmer, Dances With Bears | Apr. 22, 2011, 6:34 AM
Just four months since the first Russian crude oil started pumping into Daqing, the northeastern Chinese oil town, the Russian pipeline company Transneft has charged the China National Petroleum Company (CNPC) with violating their supply contract, and is threatening to open court proceedings in London.
The state-owned Transneft revealed to Fairplay today that the breakdown in trust between Russia and China is focused on the pricing for the oil which Transneft is pumping by its new Siberian pipeline from Skorovodino to the Chinese border, according to a contract signed in 2008 with CNPC. The presidents of China and Russia officially inaugurated the completion of the pipeline on both sides of the border on September 25, last year.
The pipeline project was first conceived by Mikhail Khodorkovskys Yukos more than a decade ago, and initial negotiations with Beijing were conducted by Khodorkovskys representatives. Their attempt to break the Transneft monopoly on pipeline oil exports was one of many problems that triggered the arrest of Khodorkovsky in October of 2003, and his subsequent prosecution and imprisonment.
The takeover of Yukos by Rosneft, and the replacement of Khodorkovsky as the prime mover in the project by Deputy Prime Minister Igor Sechin did not clear the many negotiating obstacles that arose from both sides. When finally completed in 2009, the Sino-Russian negotiations carried a $25 billion financing from Beijing, the largest loan ever made to a Russian company. Repayment is tied to the oil flow, its volume and also its price.
Ahead of the ceremonial completion of the pipelaying, Prime Minister Vladimir Putin said last year: For China, these are stable deliveries to the countrys energy balance, and for us an exit to new promising markets and in this particular case, to the expanding Chinese market.
You must be logged in to reply to this topic.