It was reported that Russia is going to take an unprecedented measure – to allow China to completely control some oilfields. This is the first time Russia made this kind of statement. Moscow has never provided similar offer to the west.

Russian newspaper View posted an article in the website on Feb. 27^th, claiming that China may get access to what the west has never touched.

It stated that the vice Premier Devorko Popovich said on Krasnoyarsk Economic Forum that Russia thought there was no political obstacles to transfer strategic oil producing reserves except continental shelf projects to Chinese investors.

Of course, no Chinese enterprise ever asked for the acquisition of controlling interests in strategic oilfield. Devorko Popovich said, ‘This is because our Chinese friends understand that we prefer to cooperate in 50% to 50% or 51% to 49%. China is always kind to others, bringing convenience and loyalty to business partners as well as protecting self interests. I think this is the best for now.’ But he also believed that there would be no political obstacles even China put forward this kind of demand.

It says what Russia actually talked about is to realize oil and gas market liberalization, which demands for law modification, since the current controlling interests of foreign investors are not permitted to exceed 50% in oil and gas exploration in Russia. So far, Russia does not allow foreigners control its underground resources. China is the first lucky country to receive this proposal.

However, the president of Russian National Energy Security Foundation Constantine Simonov pointed out that the law cannot only allow Chinese investors to control interests over 50%. If the market was to be liberalized, it would be open to everyone. The only feasible way is to add clauses not including countries conducting economic sanctions.

So far, Russia’s primary strategic partners in oil and gas field are still western countries. But when sanction towards Russia was conducted, many partners supporting this action started to hesitate. Western countries neither want to leave nor dare to invest. But Russia cannot let so important projects stranded.

Simonov said, ‘When the west put pressure on Russia, we have Plan B – to better cooperate with China.’ Permitting Chinese to control Russian strategic oilfield can solve the problem that foreign countries ceased to invest in Russia and prove the idea that no one needs Russia is completely wrong at the same time.

He said, ‘This is a direct indication for the west – Please stop the stupid sanction. This is your last chance to resume united projects, because you are not our only choice.’

The article said Simonov pointed out the unprecedented place of this idea is to let China control interests over mature oilfields. He explained, ‘We always invited the West to take part in new projects demanding investments and technologies. But now what we let China to take over are projects in operation. There’s no need to invest and you can just wait for the profits.’

Simonov thought that China is not in a rush for interests of mature oilfields and this is just a prelude of new cooperation.

A report of VOA on Feb. 27th stated that Russia who used to set defenses against China resent friendly signals to China when her antagonism against the West is getting tense.

Ever since Putin held power, Russia is constantly restraining foreign investors from controlling interests in natural resource exploration. Few foreign compaies can control interests in related fields especially oil, gas and mineral projects, which are regarded as strategic significance by Russia. Therefore, the statement of Vice Premier Devorko Popovich is quite rare.

Some analysts believes that this statement indicated that there has been a qualitative change in the relationship between Russia and China. On the other hand, Russia is encouraging China’s investment under the western sanction. Russian strategic expert Iwan Konovalov said that Russia is now turning to the east and high officials’ attitude towards China in energy field is not surprising.

Devorko Popovich also referred to the east natural gas pipeline project agreement signed by Russia and China in the conference on Friday. He believed there would be a big energy contract between these two countries soon.

For more information, please visit Zoranoc's official website: www.zoranoc.com