RUSSIA & CHINA O&G GIANTS TALK COOPERATION

RUSSIA & CHINA O&G GIANTS TALK COOPERATION

The head of Russia's Rosneft, Igor Sechin, met with the director of the Chinese National Energy Administration, Wu Xinxiong, on Wednesday to discuss joint cooperation projects with China's Sinopec and CNPC, Rosneft revealed in a statement.

After the talks, Rosneft released a statement which said in part, "The sides said they were satisfied with the level of cooperation, marking a common intention to develop and expand partnership."

Rosneft is already working with its Chinese partners on several projects.

Last October, Rosneft and CNPC inked a MOU on forming a joint venture for upstream projects in East Siberia, with Rosneft holding 51% and CNPC the remaining 49%.

The JV is for the development of the Srednebotuobinsk field. Rosneft's Taas Yuriakh subsidiary holds the license for the field's development. Rosneft has also entered into an agreement with Sinopec to supply 10 million tons of oil per year during a 10-year time frame.

In February, Sechin stated that Rosneft could enter an agreement with its Chinese counterparts to form a JV on extracting oil in Russia, including on the continental shelf.

Also, preparations for Russian President Vladimir Putin's visit to Shanghai next week are underway. A central point of discussion will be the strengthening of economic ties between the two countries, with focus especially on their respective energy sectors.

Russia and China could potentially agree on long-term gas supplies and increasing oil supplies during the visit.

The current conflict between Russia and the EU over the former's recent annexation of Crimea is likely to serve as a catalyst to realizing Russia's long-awaited agreement to export up to 60 Bcm of gas per year via the eastern route to China.

China is the largest market for Russian gas in the Asia-Pacific region.