Despite a Chinese slowdown and prospects of a Russian recession, the two Presidents Xi Jinping and Vladimir Putin have witnessed the signing of an array of energy deals to boost economic ties between the two neighbours.
Russian petrochemical producer, Sibur, in seeking to curb risks from the economy amid US and European sanctions against the country, has agreed to let China’s Sinopec buy into it.
Russian tycoon Gennady Timchenko, who owns more than 15 percent of Sibur, is among those sanctioned by the US over the crisis in Ukraine.
Sibur is not on any sanctions list.
Although Sibur has not disclosed the terms of the deal, Reuters quoted sources saying Sinopec could acquire more than 10 per cent in the Russian company.
“This transaction is in-line with our objective to strategically expand our petrochemical business overseas. Our continued partnership will help diversify and secure Sinopec’s long-term sourcing of petrochemical products. The partnership also represents the active implementation of China’s “One Belt, One Road” policy, and will help to strengthen the strategic relationship between China and Russia,” said Wang Yupu, Chairman of Sinopec.
Russian oil producer Rosneft on Thursday also signed a memorandum of understanding with Chinese oil giant Sinopec on a proposed joint development of Russkoye and Yurubcheno-Tokhomskoye fields.
Under the agreement, Sinopec has the right to acquire a 49 per cent stake in East Siberian Oil and Gas Company (ESOGC) and Tyumenneftegaz, that hold the exploration licenses for Russkoye and Yurubcheno-Tokhomskoye fields respectively.
Russia, the largest oil and gas exporter, faces a recession this year as crude prices continue to fall.
“China remains a major trade and economic partner for Russia. We see the turbulence in the world and in our economies and we are prepared for it. We will have time to discuss the problems we do have, though they were not unexpected,” Russian President Vladimir Putin said on Thursday during talks with his Chinese counterpart Xi Jinping.
Rosneft and China National Chemical Corporation (ChemChina) on Thursday also signed an agreement on the Russian oil giant’s planned subscription for a 30 per cent stake in the Chinese firm.
ChemChina’s also signed an agreement on the proposed acquisition of a majority stake in Russia’s Far-East Petrochemical Company (FEPCO).
“The achieved agreements are indicative of a special level of cooperation with our Chinese partners. Joining efforts will further improve efficiency of our work by developing cooperation in all areas including such strategically important projects as FEPCO,” said Rosneft CEO Igor Sechin.