Russia’s Energy Deals with East Asia: Who Wins?

Russia has consummated some huge energy deals with China in recent weeks. These deals are – or at least are being advertised as – major steps forward in the Russo-Chinese energy relations, Russia’s pivot to Asia – which uses big energy sales to upgrade its influence and standing – and the development of the energy base in Eastern Siberia, the Arctic and the Far East. All seen in Moscow as necessary preconditions for Russia’s return to the stage as a great, independent Asian power, and as a major energy player for years to come.

In the biggest deal, worth an estimated $270 billion, Rosneft agreed to supply CNPC (China National Petroleum Corporation) with 365 million tons of oil over 25 years. In return, CNPC has apparently made a pre-payment to Rosneft of around 70 billion. The deal represents 15 million metric tons of crude oil annually for 25 years, at just over $10 billion each year. The oil will probably go through the existing Eastern Siberia-Pacific Ocean (ESPO) pipeline to Daqing, China