After a meeting with the Chinese Deputy Prime Minister Zhang Gaoli, Russian President Vladimir Putin, announced that his country’s leading oil producer is preparing a deal to supply China with oil that could be worth as much as $60 billion.
Russia, historically, sends most of its oil and gas to European markets, but as the crisis continues to the West, leading to reduced imports and efforts to cut dependence on Russia, Putin has advised his state-owned companies to forge closer ties with Asia.
The newly elected Chinese leader Xi Jinping, made his first overseas trip to Moscow back in March, where Rosneft promised to begin boosting oil supplies to China. Reuters believe that the deal made on Thursday is likely connected to that agreement.
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Putin stated that “a large-scale contract, without any exaggeration, has been prepared by Rosneft. Supplies to China are expected in volumes of hundreds millions of tonnes of oil. And this in total worth over $60 billion.”
Igor Sechin, the Executive Chairman of Rosneft, explained that the East Siberian fields that supply most of Russia’s exports to China, will be expanded over the coming years to send more oil. Currently most pipelines head towards Europe, but new ones will be constructed to increase the carrying capacity to China.
Putin also plans to send more natural gas to China, claiming that he had “big hopes for cooperation between China and Russia's Gazprom and Novatek, Russia's second-largest natural gas producer.”
By. Joao Peixe of Oilprice.com
Joao is a writer for Oilprice.com