It's being reported that China's top oil and gas producer is
trying to set up another joint venture in Russia next year, further
tapping into the energy-rich country.
According to yesterday's China Business News, the China
National Petroleum Corporation (CNPC) has hammered out a
preliminary agreement with its Russian counterpart South Ural Oil
Group to establish its second joint venture in Russia. It's likely
the final contract will be inked later this year or in early 2007,
the report said.
If sealed, the deal will result in a CNPC investment ranging
from US$7 million to US$7.5 million, according to Russian media.
That's not a huge investment but is in line with Russian energy
laws and regulations which state that only by cooperating with
local partners can foreign oil companies extract natural resources
in the country.
"It's a wise and practical move for CNPC to partner with South
Ural Oil," China Business News quoted an anonymous
industrial insider as saying. "Through this approach, CNPC can get
access to oil recourses in Orenburg State, where the Russian firm
is located, and make use of local production and transportation
infrastructures as well."
CNPC press officer Liu Weijiang refused to comment on the
report, saying he was not aware of the situation described by
either Chinese or Russian media. "And I have received no
authorization to disclose any information on this matter," he
added.
An analyst from CNPC contended that in the long run it would be
a win-win situation for both Russia and China to strengthen
cooperation on oil and gas as well as joint production.
"China demands more oil and gas to fuel its fast-growing economy
while Russia has to diversify its energy export business to fend
off risks," the analyst commented on condition of anonymity.
"Russia's energy-rich far-eastern area is in desperate need of
foreign investment to extract resources. In addition it's
cost-efficient for the two countries to strengthen energy
business."
(China Daily December 1, 2006)