Gazprom and CNOGC to extend cooperation to oil sector

Dec 21, 2004 01:00 AM

The Russian natural gas giant Gazprom and the Chinese National Oil and Gas Corporation (CNOGC) have agreed to extend their cooperation to the petroleum industry, Sergei Kupriyanov, spokesman for Gazprom's CEO, told.
"This envisages, among other things, the Chinese side's involvement in oil extraction projects in Russia," Mr Kupriyanov said. The two energy majors signed an agreement on cooperation in the gas sector, he recalled.

Speaking in the German city of Schleswig, Russian President Vladimir Putin said the Chinese National Oil and Gas Corporation may be invited to take part in the development of Yuganskneftegaz's assets. Yuganskneftegaz, the main production unit of Yukos, was auctioned off to cover the embattled oil giant's huge back tax bills.
An energy market analyst told that a powerful oil and gas company was now being formed on Gazprom's basis. Controlling interest in that new company will belong to the government, with the rest of the stock in private hands.
"Which markets the new Gazprom will give priority to will be a determining factor not just for Russia's export structure and its system of foreign economic ties, but also for energy market tendencies on the global scale," he argued.

The analyst also said that demand for oil on the part of developed countries was growing, but at a slow pace, while the fuel needs of emerging Asian markets, notably China, were soaring. But the global oil output does not keep up with Asia's ever-growing appetite, hence the exorbitant prices.
"The oil prices now remain at their record highs, and most oil analysts predict their further rise in the long term. In this situation, the development of Russo-Chinese cooperation in the oil sector is an issue of fundamental importance not just to Russia and China," he said.

The analyst argued there was "a strategic decision" behind the signing of the cooperation memorandum between Gazprom and the Chinese National Oil and Gas Corporation, one concerning "the selection of development priorities for the Russian oil industry, at least for its government-controlled part."

Source: Russian Information Agency Novosti
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