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Turning East
Russia Ready to Strengthen Energy Ties With China

Moscow is looking at allowing Chinese firms to own majority shares in its strategic oil and gas fields for the first time, according to Deputy Prime Minister Arkady Dvorkovich. Reuters reports:

“We have a strategic partnership with China and now decisions are made much faster than before. In particular, we have a gas contract, a second one will be signed soon. Now we know China better: their motives and intentions are understood,” [Dvorkovich] told a conference in the Siberian city of Krasnoyarsk.

“There used to be a psychological barrier. Now it doesn’t exist any more. We are interested in maximum investments in new industries. China is an obvious investor for us.”

Western sanctions have dried up the pool of investors available to Russia, which has the Kremlin looking east for capital. Energy-hungry China has proved eager to take advantage of its neighbor’s difficult situation, signing what appear to be favorable terms for one major gas deal and preparing to finalize another in the coming months.

But while Russia may have found a way to lessen the impact of recent sanctions, its energy future is still looking gloomy without Western support. The country’s Siberian shale reserves are underdeveloped, and Chinese money alone won’t be enough to get oil and gas flowing from the remote region. Beijing itself has found it very difficult to start commercially producing hydrocarbons from shale, and without the technology and know-how that Western companies bring to the field, Moscow is going to have an even worse time catching up to the U.S. energy boom.

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  • Kevin

    The Russians may find China’s embrace very difficult to escape from.

  • Anthony

    “But does this alliance of convenience have staying power? Several years ago, a Moscow-based investment banker wrote that Russia and China make a perfect couple. Russia has resources that China needs, while Russia needs capital and China has excess savings. True enough, but China also has excess people looking for living space – 100 million alone in the provinces bordering Russia….”

    A question to pose is what large interest really unites Russia and China.

    • Kevin

      They are united in their unhappiness with the current international system. Both think it is depriving them of their rightful place in the sun.

      • Anthony

        Read feature “A World Transforming” in current TAI for additional context.

  • iconoclast

    The Far East will not long be Russian.

  • Josephbleau

    Siberia will become China’s libenstraum

  • Fat_Man

    If Russia were run by smart people they would be looking to sell most of the territory east of 90°E to one or more Asian Powers. Not just China. The Japanese would definitely want the Kuril Islands all the way to Kamchatka, and probably Sakhalin, which has lots of oil, too. The US should consider buying Kamchatka, which anchors the Aleutians and Chukotka which is the other side of the Bering straight. The Koreans might want Primorsky which would block China from the Sea of Japan.

    Of course if Russia were run by smart people, they would not want to have any weapons more powerful than a popgun.

  • GS

    That’s where they belong, in the civilizational sense. It serves them right.

  • Jacksonian_Libertarian

    This is Russia at its stupidest, for once this camel gets its nose under the tent they will never get rid of it.

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