Cash-rich China baffled by Russia on oil pipeline

[bemildred]

Sounds to me like they are dickering over the price ...

Beijing - Behind the smiles and handshakes at Beijing's Great Hall of the People this week, Chinese and Russian officials are pushing conflicting trade agendas within their 'strategic partnership'.

Although the two sides signed three agreements on oil and gas cooperation after talks between Russian President Vladimir Putin and Chinese President Hu Jintao on Tuesday, China is likely to be disappointed by the lack of any firm commitment by Russia to build an oil pipeline from Siberia.

Putin expounded Russia's vision for exporting huge volumes of natural gas to China but, publicly at least, he apparently failed to say anything about the oil pipeline.

'I feel very satisfied with our economic and trade cooperation,' Putin said at the start of his talks with Hu on Tuesday. \

Monsters & Critics

[cliss]

1. I just think that Russia doesn't want to supply

China with oil. In a related article, it said that China was "puzzled" that Russia didn't seem to be very motivated to sell, even though China is loaded with dough and they're desperately looking for energy sources.

The article said that China has "scoured the globe" and is always coming up short.

Well, maybe Russia just wants to sit on th asset! As other countries start running out of black gold, they want to be the last holdout, when prices go through the roof.

But with Putin, who knows?

[bemildred]

2. I think Pooty-poot is doing just what one would expect.

He's an able and ambitious leader that came up through the ranks, and he's done what you would expect, considering the situation when he took power:

1.) He kicked Khordovsky and the global money minions in the ass and took back control of Russia's energy assets.
2.) Now he's working on consolidating his position (internally and externally) and marketing his assets.

The interesting question is going to be what he does about Russian economic and demographic decline. And you have to say, he's going to have to do something about the mess in the Caucasus. Chechnya was Pooty-poots "George W. Bush" moment, and it's a real weight around his neck.

[AlCzervik]

3. well they gladly sell them weapons but maybe denying them some oil

is Putin's way of keeping them in check?

[Neil Lisst]

5. Russians have been overproducing a long time

here are the reserves


here are the production numbers, notice the high production for Russia compared to reserves


No country is depleting its oil faster than Russia.

Russia is both an exporter and an importer of oil. On one side of the country, they will be an exporter, and on the other, an importer.

Russia is wary of China, always, because that closeness gives them the kind of predictable friction points that mimic the subterranean forces that produce earthquake.

Russia and China must always watch each other more closely than they watch us.

[NickB79]

6. Wow, thats less than 8 yrs at that rate

30 million barrels per day x 365 days per year = 10.95 billion barrels per year. 80 billion barrels of reserve in the former USSR/Eastern Europe divided by 10.95 billion barrels is 7.3 years until complete depletion of known reserves!!!

To get extra-scary, that data is already 3-5 years old! Even if they've cut back production (doubtful considering the profits to be made at $60/barrel) it looks like they're less than a decade away from widescale depletion on a massive scale.

[anotherdrew]

7. they've become very good at ultra-deep ocean drilling IIRC

they may have access to more reserve than those figures reflect. Remember those figures are based on what's profitable to recover at $20-30 per barrel, at 60 or more it's worth it to go after the oil that was to expensive to drill before, I'm not sure if there are any good estimates of how much is available in these ultra deep deposits.

[hedgehog]

4. I heard some interesting things recently about new plants in Russia

Maybe Putin expects Russia will be needing that oil for itself pretty soon.

[oblivious]

8. Russian oil pipeline to China 'beyond doubt', Putin says

Mar 22, 2006
Beijing - Russian President Vladimir Putin on Wednesday said it was 'beyond doubt' that Russia will build an oil pipeline from Siberia to China, as he held more talks with Chinese leaders.

'If the project is implemented, and it is beyond doubt, it will make it possible to considerably increase the oil supply volumes from Russia to China,' Russia's Itar-Tass news agency quoted Putin as saying.

...On Wednesday, Russian Foreign Minister Sergei Lavrov said construction of the oil pipeline, which would be a branch of Russia's main pipeline to its far east, 'will be launched in the coming months', Itar-Tass said.

'The feasibility study will be conducted jointly in an expeditious manner,' Lavrov was quoted as saying.

Energy minister Viktor Khristenko said construction of the oil pipeline would be completed before the end of 2008, the agency said.

...The scheduled opening of an oil pipeline from Kazakhstan to China this year will allow it to raise imports of Russian oil to at least 15 million tons annually from this year, CNPC said.
http://news.monstersandcritics.com/asiapacific/article_1149136.php/Russian_oil_pipeline_to_China_beyond_doubt_Putin_says

[formercia]

9. Putin is stalling

until the Chinese agree to pay for the construction of the pipeline. It will probably go via Vladivostok so they can ship to japan as well.

[oblivious]

10. Here's BBC's map showing alternative routes.

I guess one of the issues not mentioned is whether Siberia will have enough oil long enough to satisfy both markets.


http://news.bbc.co.uk/2/hi/asia-pacific/4455542.stm

[oblivious]

11. "China oil pipeline construction to start in 2006 - Russian FM"

...The mooted $11.5-bln dollar pipeline from East Siberia to the Pacific is slated to pump 1.6 million bbl/d for deliveries to Japan and China, but has been dogged by controversy as its planned route lies very close to Lake Baikal, the world's largest freshwater body. Environmentalists are still seeking to get the route changed, claiming any accident could cause irreparable damage.

http://en.rian.ru/russia/20060322/44641931.html