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China - Consequences of access to oil

Bert

Sr. Member
Reaction score
2
Points
210
From the beginning of the war in Iraq, I don't believe the US invaded to primarily secure
and control oil in Iraq.  I do believe that the US is at war with Al-Qaeda and is concerned what
Al-Qaeda could do in the region if the government in Saudi Arabia fell, or the actions
of other regional players. 

One consequence of the there has affected oil access, price, and availability for
major regions like the EU, Russia, China, and the US.  The industrialized  countries are locating
other sources of oil putting pressure on non-Araba/Gulf regions.  The EU and Russia are
making long term arrangements for natural gas and oil, the US is seeking other areas, and
Russian domestic distribution is faltering under corruption and mismanagement.  China seems
particularly vulnerable as its increasing energy-using industrialization continues to grow.
Without Russian oil/natural gas supplies and constricted access to the Gulf region,
oil rights in the South China Sea, China is in a pickle.

The following article is interesting as it may describe some fall-out from current problems
in the Gulf region.


As Russia Goes Western, China Pays the Tab
August 20, 2004
www.stratfor.com

Summary


Russia's Yukos crisis has put Russian oil exports to China at risk. The degrading situation is a
miniature of the troubles that overall Russia-China relations are suffering -- and will continue
to suffer.


Analysis


Gennady Fadeyev, CEO of Russia's state-owned railway firm, Russian Railways Co., said
Aug. 18 the Chinese government had agreed to pay for shipping Russian crude to
China. "Should there be any problems with payments, the Chinese side will cover
transportation expenses," he said.


Fadeyev's statement is testimony to the crumbling relationship between Russia and
China, and highlights the large-scale collapse of energy cooperation between the two
states.


Russia sends China 124,000 barrels per day (bpd) of its crude -- all of which comes from
Yukos subsidiary Tomskneft via rail tankers.


China's problem is that its Russian supplier is being ripped apart by Russian authorities
because its largest shareholder, Mikhail Khodorkovsky, got a bit too politically
ambitious. Yukos has had all of its accounts frozen, the tax ministry has seized
Tomskneft, and any income from the overall firm is immediately transferred to the
government to cover the company's $3.4 billion bill for back taxes.


Fadeyev noted that Yukos's shipping fees were pre-paid to Sept. 10, and that
the Chinese had pledged to pay any such fees beyond that point should Yukos
prove unable. Such payment might be the only way China will continue to get oil
from Russia. During the past three years, China made the unfortunate decision to
get in bed with Yukos and Khodorkovsky, directly lobbying the Kremlin for projects
that would enable Yukos-Chinese energy links.


The biggest such deal was a 2002 agreement to supply China with Yukos crude.
Under the deal, Yukos was to supply China with $150 billion of oil -- ultimately at a
rate of some 600,000 bpd -- during the next 20 years. Implementing such an
agreement would have required two things: a decision by the Russian government
to build a pipeline to China, and the continued existence of Yukos.


Neither is any longer in the cards. Nor are any other bold moves, such as the
suggestion Aug. 19 by Fang Chunyong, an economic aide at the Chinese Embassy
in Moscow, that a Chinese state-owned oil firm could place a bid for Yuganskneftegaz,
another subsidiary of Yukos Oil Co.


But the Kremlin's disillusionment with China runs deeper than oligarch-related politics.
At its core is the rise of President Vladimir Putin. Unlike his predecessor, Boris Yeltsin,
Putin is an unabashed Westernizer. Yeltsin had approached Beijing about a possible
alliance -- one that, because of Russia's post-Soviet weakness and China's growing
strength, would have left Russia the weaker partner. Putin and the cadre of
St. Petersburg modernizers he has placed in key economic positions want to take
Russia in a very different direction: resurgence via Westernization. That means minimizing
Chinese economic and migrant penetration into the dramatically under populated Russian
Far East.


For China, this requires a fundamental re-evaluation of the country's entire geopolitical
strategy. In 1999 Russia needed China to maintain international relevance, while China
thought of Russia as a potential junior ally. By 2004 the tables had turned. Now
Russia sees China as a potential threat, while China sees Russia as its route to energy security.


Without Russian energy, China can do only two things: ship ever-increasing amounts
of oil from the Middle East past regional foes and/or U.S. allies India, Singapore,
Australia, Vietnam and Taiwan; or spend exorbitant amounts of cash to build
infrastructure to import crude from the Kazakh Caspian region, some 3,000 miles
away from China's population centers. That is not an easy decision, nor one that
will result in both adequately large and adequately secure energy supplies.


Despite the mistrust, there is little reason to expect any breaches in the relationship for years.
Russia remains China's No. 1 source of imported weapons, and as long as Russia has access
to military technology that the Chinese cannot get elsewhere, Beijing has no reasons to
push Moscow to do anything it does not want to do.


In the meantime, the Russians are still willing to sell the Chinese oil -- but only if the
Chinese prove willing to pay for postage.

 

canuck101

Full Member
Reaction score
0
Points
0
nice place to live in the near future.  You have Russia selling billions of dollars of weapons to India and China. Russia, China, Pakistan,and India all have nukes and they all don't like each other.India and China are growing fast in economy and population resources will come to be more of an issue between each other as i said a nice place to own some land in the future. ;D ;D
 
U

unknownsoldier

Guest
Bert said:
From the beginning of the war in Iraq, I don't believe the US invaded to primarily secure
and control oil in Iraq.   I do believe that the US is at war with Al-Qaeda and is concerned what
Al-Qaeda could do in the region if the government in Saudi Arabia fell, or the actions
of other regional players.  

One consequence of the there has affected oil access, price, and availability for
major regions like the EU, Russia, China, and the US.   The industrialized   countries are locating
other sources of oil putting pressure on non-Araba/Gulf regions.   The EU and Russia are
making long term arrangements for natural gas and oil, the US is seeking other areas, and
Russian domestic distribution is faltering under corruption and mismanagement.   China seems
particularly vulnerable as its increasing energy-using industrialization continues to grow.
Without Russian oil/natural gas supplies and constricted access to the Gulf region,
oil rights in the South China Sea, China is in a pickle.

The following article is interesting as it may describe some fall-out from current problems
in the Gulf region.


As Russia Goes Western, China Pays the Tab
August 20, 2004
www.stratfor.com

Summary


Russia's Yukos crisis has put Russian oil exports to China at risk. The degrading situation is a
miniature of the troubles that overall Russia-China relations are suffering -- and will continue
to suffer.


Analysis


Gennady Fadeyev, CEO of Russia's state-owned railway firm, Russian Railways Co., said
Aug. 18 the Chinese government had agreed to pay for shipping Russian crude to
China. "Should there be any problems with payments, the Chinese side will cover
transportation expenses," he said.


Fadeyev's statement is testimony to the crumbling relationship between Russia and
China, and highlights the large-scale collapse of energy cooperation between the two
states.


Russia sends China 124,000 barrels per day (bpd) of its crude -- all of which comes from
Yukos subsidiary Tomskneft via rail tankers.


China's problem is that its Russian supplier is being ripped apart by Russian authorities
because its largest shareholder, Mikhail Khodorkovsky, got a bit too politically
ambitious. Yukos has had all of its accounts frozen, the tax ministry has seized
Tomskneft, and any income from the overall firm is immediately transferred to the
government to cover the company's $3.4 billion bill for back taxes.


Fadeyev noted that Yukos's shipping fees were pre-paid to Sept. 10, and that
the Chinese had pledged to pay any such fees beyond that point should Yukos
prove unable. Such payment might be the only way China will continue to get oil
from Russia. During the past three years, China made the unfortunate decision to
get in bed with Yukos and Khodorkovsky, directly lobbying the Kremlin for projects
that would enable Yukos-Chinese energy links.


The biggest such deal was a 2002 agreement to supply China with Yukos crude.
Under the deal, Yukos was to supply China with $150 billion of oil -- ultimately at a
rate of some 600,000 bpd -- during the next 20 years. Implementing such an
agreement would have required two things: a decision by the Russian government
to build a pipeline to China, and the continued existence of Yukos.


Neither is any longer in the cards. Nor are any other bold moves, such as the
suggestion Aug. 19 by Fang Chunyong, an economic aide at the Chinese Embassy
in Moscow, that a Chinese state-owned oil firm could place a bid for Yuganskneftegaz,
another subsidiary of Yukos Oil Co.


But the Kremlin's disillusionment with China runs deeper than oligarch-related politics.
At its core is the rise of President Vladimir Putin. Unlike his predecessor, Boris Yeltsin,
Putin is an unabashed Westernizer. Yeltsin had approached Beijing about a possible
alliance -- one that, because of Russia's post-Soviet weakness and China's growing
strength, would have left Russia the weaker partner. Putin and the cadre of
St. Petersburg modernizers he has placed in key economic positions want to take
Russia in a very different direction: resurgence via Westernization. That means minimizing
Chinese economic and migrant penetration into the dramatically under populated Russian
Far East.


For China, this requires a fundamental re-evaluation of the country's entire geopolitical
strategy. In 1999 Russia needed China to maintain international relevance, while China
thought of Russia as a potential junior ally. By 2004 the tables had turned. Now
Russia sees China as a potential threat, while China sees Russia as its route to energy security.


Without Russian energy, China can do only two things: ship ever-increasing amounts
of oil from the Middle East past regional foes and/or U.S. allies India, Singapore,
Australia, Vietnam and Taiwan; or spend exorbitant amounts of cash to build
infrastructure to import crude from the Kazakh Caspian region, some 3,000 miles
away from China's population centers. That is not an easy decision, nor one that
will result in both adequately large and adequately secure energy supplies.


Despite the mistrust, there is little reason to expect any breaches in the relationship for years.
Russia remains China's No. 1 source of imported weapons, and as long as Russia has access
to military technology that the Chinese cannot get elsewhere, Beijing has no reasons to
push Moscow to do anything it does not want to do.


In the meantime, the Russians are still willing to sell the Chinese oil -- but only if the
Chinese prove willing to pay for postage.

Those imputations that USA wants to secure Iraq because of oil   is completely false and unsubstantiated. All countries with no natural resources for oil needs it. South Korea[oh their closet commie activists are using that argument] needs oil. cuba needs oil, Vietnam needs oil, Britain needs oil, Taiwann and China needs oil NAME ANY COUNTRY WHO DOES NOT ACT IN THEIR OWN INTEREST AND I WILL have myself fired . They are just so irrational and vindictive and oh, my........... Arab countries better dare not say that US just wants to secure their oil or else....ever heard that argument of economists from US saying...."well, arab rogue country will never survive if sanctions to use food embargo on them were approved...[though not good argumetn]. This one is good argument. "Who owns those oil companies. Either they are corporations with Arab sheiks' shares of stocks, British with Kuwait and Saudi Arabian monarchy ownership. Alberta can secure enoough oil for their, USA's daily oil consumption. Brunei can supply America. Brunei has a well-behaved monarchy. Saudi and Kuwait too are well behaved.
 

Cdn Blackshirt

Army.ca Veteran
Reaction score
34
Points
530
It is interesting that China along with Russia both voted against the most recent
UN Resolution on Sudan as apparently China is trying to secure Oil Contracts
there as well....



Matthew.  :)
 
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