Did This Oil & Gas Deal Just Change The Global Energy Balance?

Tyler Durden's picture

Authored by Dave Forest via OilPrice.com,

One of the biggest energy stories this year has been Russia’s Rosneft buying India’s Essar Oil - giving the Russian company a firm grip on one of the world’s biggest emerging oil and gas markets

And this past week, that story got more complex. With Rosneft striking another big deal — drawing in another heavyweight energy nation. 

China. 

Rosneft announced Friday it is selling a significant chunk of its equity to Chinese investors. In this case, little-known exploration and production firm CEFC China Energy. 

Although few investors know CEFC, the company is bringing significant capital to the deal. With the firm agreeing to pay $9 billion to acquire a 14.16 percent stake in Rosneft. 

The deal is historic in being the first major buy-in by China into the Russian oil and gas sector (although Chinese firms have been involved in financing LNG export projects in the Russian Arctic).

Showing the strength of the ever-growing ties between Russia and China in the energy space. 

Rosneft and CEFC have been at the center of that burgeoning relationship. With the two companies having signed a deal this past September for long-term supply of Russian crude into China. 

This week’s equity purchase further cements those business ties. And shows that China sees Russia as a critical ally in the energy game going forward.

But there are implications well beyond these two countries. With China now having backdoor access into markets like India — through Rosneft’s recently-acquired holdings in that country. 

That’s a critical development for the world energy picture. Given that Chinese companies haven’t directly gained much access into India — despite the nation being one of the most important emerging players on the energy stage. 

Ownership in Rosneft could help change that. And could open up opportunities in other parts of the world — with Rosneft currently having operations in places ranging from Egypt to Brazil to Venezuela. 

An intriguing side note to the story: CEFC is buying the Rosneft stake from Glencore, and Qatar’s sovereign wealth fund. Who reportedly purchased the interest just nine months ago — for $12 billion.

That means these holders are taking a 25% loss on the sale, less than a year after buying in. But in the meantime, Glencore was able to strike a lucrative deal to trade Rosneft’s Russian crude — probably making up for the losses on the Rosneft equity, and then some. 

All of which shows just how complex things are in this rapidly-changing corner of the energy world. Watch for more China-Russia energy deals — and emerging influence from these two energy superpowers in other key markets like India.

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Fireman's picture

It's already over as China's gold backed Yuan brings the Saudi Barbarian oil peddlers under its wing. Now that the USSAN banksters have stolen back all that "treasury" debt owed to the feudal crypt of Saud and tried to frame them for 9 11..... Kiss the IOU Petroscrip (no longer) I$I$ backed Saudi Mercan toilet paper free loader dollah goodbye. Jim Wille's Scheiß dollah is coming home to Slumville in a tsunami of toxic derivative shit after all the lost judaic wars and bananas republic debt splurge and it's going to guarantee overnight Third World status for 98% of USSANS, already on the edge of ruin. No one likes a slacker and a hustler and the "exorbitant privilege" reserve currency gig is over as the Pentacon mob fizzle out in a swamp of hubris. China's Korea and China's "big, beautiful" South China Sea "resort" islands are bristling with big sticks and USSA can do NOTHING, and the rest of humanity knows it and enjoys seeing the snaggle-toothed, drug-addled, big mouth dumb a$$ mutt get kicked in the face. Ya'll had a good run as long as the anglozionazi abomination lasted but now it's high time to get out while you're still ahead. Dump the petroscrip and prep before the big flush washes you down the Wall St bankster sewer in the imploding shitter of the Potemkin Village idiot "economy" of misery and carnage for the Zero 1% scum that own US.

The only war USSANS will be fighting in the future is the long postponed and much overdue Slumville Civil War reloaded.

http://www.voltairenet.org/article197864.html

https://www.youtube.com/watch?v=HeuUq8qss2Q

 

Don in Odessa's picture

Do you honestly believe the US will go down without a fight? If the history of cycles repeats, as it always has, this time the endgame for this generation will be a fight, fought on a global scale.

sickavme's picture

Do you really think this crop of kids will go to war if the life of the country was at stake?

I doubt it... they are so mentally handicapped that they argue if they are a boy or girl or not...

 

It will be up to us 90's brats(again) to do something about it...

Tugg McFancy's picture

There's a few more people out there than just fattie gay safe spacers and iphone junkies who are overrepresented in the continual clickbait stories.

researchfix's picture

"There's a few more people out there than just fattie gay safe spacers and iphone junkies who are overrepresented in the continual clickbait stories."

I believe that. But what would be their plans? Take on the rest of the world, or clean house?

BennyBoy's picture

 

Its as if these trans-asia countries want to exploit their own oil, gas and minerals for themselves, without the USA. 

Next up: USA lies, demonizes, creates false flags, overthrows govs, bombs with cruise missles then cries like an aging, whiney bitch that is losing its soul crushing empire.

Took Red Pill's picture

Corbett recently did a 9 minute video about China and gold backed oil which relates to this. The end of the petro dollar is getting close;

https://www.youtube.com/watch?v=geWnRz1XBTw&feature=em-subs_digest

any_mouse's picture

What exactly would they be defending?

The Petrodollar? The AIPAC Congress? The CIA's opium for weapons programs? The right of Multi National Corps to do as they please?

Defending the FED?

Hollywood?

Wall Street?

Pull It.

Last of the Middle Class's picture

I refuse to go to war without a new iphone X and fb to keep up with my neighbor's cat!

Wahooo's picture

Go to war over China/Russian oil deals? You gotta be kidding. Wartime draft will never happen again. Too much violence at the local levels for that to ever happen. You think these young men are lazy and dumb? They are not too dumb to figure out what body bags and funerals mean to themselves and their friends, and they won't be going to war. So if some of you older righteous fucks want to go fight the Chinese and Russians, have at it. Some of us older fucks will be rioting in the streets side by side with the youngsters. Fuck the MIC and the proud of the MIC.

ChaoKrungThep's picture

Riot in the streets, you'll be shoot down like a dog - legally! Read your NDAA 2017.

 

DjangoCat's picture

They may not need many boots on the ground to go to war.  Drones and robots are the new army.  Trouble is, I think the costs and corrupt practices of the MIC have buggered the system.

They are not likely to win.

No big bombs please.

 

Mike Masr's picture

Kids on todays college campuses get offended if you don't use language that is PC. These snowflakes need to find a safe space and cry with a teddy bear. 

I can't even imagine these kids wanting to go to war if the life of the country was at stake.

PrivetHedge's picture

Us 90's brats will be doing exactly nothing about it.

The US government is the worst in the world, any change can't help but be a major improvement.

ChaoKrungThep's picture

Do you really think this crop will have a choice? Heard of conscription? No more card burning, but shooting on sight, troops on the streets. Read the latest NDAA - infinite detention without charge, or benefit of counsel, warantless search & seizure, lethal force to resistance.

Have you been outta town? The fascists have not.

https://www.activistpost.com/2016/06/ndaa-2017-includes-draft-for-women-...

 

Mike Masr's picture

Days of convention war are over unless you are are a little shithole country with no resources.

A war on a global scale would become thermonuclear very quickly.

Russia’s Nuclear Triad Modernization

https://southfront.org/russia-defense-report-nuclear-triad-modernization/ 

Nuclear Weapons: Who Has What at a Glance

https://www.armscontrol.org/factsheets/Nuclearweaponswhohaswhat

Fireman's picture

USSA has NEVER EVER fought a real army with real soldiers. Look at the history and smell the genocide by brutal anglosxon thugs. (Forget about the lies concerning defeating NAZI Germany. USSAN banksters financed them and USSAN companies supplied them against the Soviets. It was the Russians that wiped out the NAZIS and liberated Urupp, ask any German). In fact USSA has never ever fought a peasant pajama clad , flip flop wearing army and won. The ongoing judaic wars and genocide in the ME are the final nail in the coffin. USSA'S last war will be its Slumville Civil War reloaded and the sides will be glad to take "humanitarian help" from all and sundry as Slumville burns. It aint rocket science, it is a simple analysis of a fractured culture of mutt tribes ruled by chosenites and fed a diat of hubris and lies, not to mention opiated and addled to the gills. Shit is about to meet the fat when the free lunch and "exorbitant privilege" of printing USele$$ "currency" finally ends.

 

Oh and don't forget for both Russia and China, if indeed not the rest of humanity...it is personal, very very personal.

Crazy Or Not's picture

House of Saud genuinely believes they are masters of the Universe, their levels of decadence and personal indulgence makes Trump's enthusiasm for Gold decoration look decidedly modest. Being the keepers of Mecca and stamping a 5***** Clock Tower Hotel OVER their holy of Holies, gives one an idea of where they see themselves. US military backed - without question in the face of daily human rights violations and multiple war crimes- or any murmor from the entire west,  as well as the default go-to nutjub supplier for mossad/deep state black ops encourages unprecidented levels of unchecked behavour beyond those tolerated from regimes elsewhere. A dire downward spiral is likely to continue for some time.... 

 

ChaoKrungThep's picture

The House of Saud is filled with old camel thieves & pouting braves eager to spin the wheels of their Ferraris. But they all know that when the oil runs out, they'll be dumped in the desert like rotting goats. Thus the bravado that masks the fear. The long US plan - to return Mecca to Hashamite - control might work. The Jordanians are pragamatic, pliant and know their limitations (I worked there for 2 yrs). They get on with their neighbors, even the Israelis, who dumped a million or so Palestians on them. Their rulers tend to marry Americans. Their control of Mecca would give the Americans great influence (and reliance). They're playing a quiet, long game. None of this "Rivers of Blood" nonsense.

Hillarys Server's picture

Good points and nice poetry, thanks!

As the US goes down I fear it will flex it's only remaining muscle, namely death, baby killing and military threats of death,

And eventually China, Russia, North Korea or somewhere will flex back or get into a position where they can't back down, show weakness and look defeated, and there will be a hot exchange that will escalate and rapidly warm the whole earth.

It doesn't seem like the US professional death merchants will all take down their shingle at once and pretend to be Methodist ministers.

ChaoKrungThep's picture

For once in many years, I hope for a military coup in the US. Deep State delusion and govt incompetence are pushing toward unwinnable war. The US's only chance is for the military, whom I assume know the real strenght of their forces and the "opposition", will not get to "no back down" stage. Does Trump see this, handing over the game to his generals? He's a businessman. He knows killing future customers is bad for business. His civilian cabinet are fools, has-beens from Wall St and while his generals are hardly better, at least they've seen death. They may be a steadying hand on the trigger. 

Bigo2's picture

There is this anal sphincters ring muscle you have forgotten it will also flex...

giovanni_f's picture

"All of which shows just how complex things are in this rapidly-changing corner"

There is nothing "complex". Russia and China are opting out of the Petrodollar System.

ChaoKrungThep's picture

But "opting" out will be very tricky. The US won't wish them well.

sparksmass's picture

I thinik you need to cut back on the Jim Willie

Fireman's picture

Love him or hate him...Jim still be the man.

What did you predict?

 

http://goldenjackass.com/forecast.html

BritBob's picture

Falklands Oil

By a ruling of the UN, Argentina will extend its maritime platform (Politica Argentina) ; New map of the maritime platform reaffirms the sovereignty of Malvinas with UN endorsement (ElCronista); Argentina enlarges its territory 35%, with a UN endorsement ...(La Capital).To add to this euphoric atmosphere the Argentine Foreign Minister stated, ''This is a historic opportunity for Argentina. We have taken a great step in the demarcation of the outer limit of our continental shelf; the most extensive boundary of Argentina and our border with humanity,'' Foreign Minister Susana Malcorra told La Nacion, which tomorrow will publicly announce the details of this resolution. (Susana Malcorra, quoted by Dinatale M, La Nacion, Argentina, 27 March 2016).

 

But what is the truth...

Argentina's Continental Shelf Claims and The UN CLCA Commission (1 page):-

https://www.academia.edu/33898951/Argentinas_Continental_Shelf_Claims_-The_UN_CLCS_Commission

 

hestroy's picture

You stole that island. You stole it like other land where you killed millions. You are ordinary thieves and murderers.

dogismycopilot's picture

China is kicking ass and taking names in Iraq. 

Number of Chinese soldiers killed in Iraq since 2003?

Zero.

stecha's picture

"Brics " nations once again make manuvers to stagenate U.S. power in energy. Cut them off from swift you say. we will cut you off from the world they say.

Last of the Middle Class's picture

The days of changing all oil into dollars before it can be sold are done. The technology exists to bypass the US dollar and the savings are enormous when you punch out a middle man. Add to that the available gas through new technology and the OPEC is a useless relic. Thank the lord. The downstream effects still haven't been factored in and it's does not bode well for TESLA if the government subsidies fall off. Essentially everyone on the planet will have a way to get oil without going through the US dollar and for competition that's a good thing. For the bankers and commodity traders, not so much.

Pasadena Phil's picture

Yeah really. Russia's economy is smaller than California's and China is a major oil importer. The US can go it alone with energy. Keep dreaming ZH. Wishing doesn't make it so. The clam-based model of world domination will collapse before the dollar-based world does.

DjangoCat's picture

The US can go it alone on energy?? Last I saw, US produced 9.6 MBD out of some 16MBD consumption, and that 9.6 MBT was produced on top of an ever growing mountain of debt to keep the oil flowing.  Dream on my friend. 

DjangoCat's picture

The US can go it alone on energy?? Last I saw, US produced 9.6 MBD out of some 16MBD consumption, and that 9.6 MBT was produced on top of an ever growing mountain of debt to keep the oil flowing.  Dream on my friend. 

esum's picture

The USSA pushed these two into this through the stupid obama/clinton "reset" (initiating another Cold War)... and so the two reacted with an economic alliance... do you blame them..

And so China retaliated not only with this alliance but militarized islands... and giving the fat little ugly fuck the green light with his NUKE program... the china proxy threatens now with fierce rhetoric and thanks again the the limp wristed bendover bathhouse towelboy muslim jihadi TRAITOR the us military has been gutted and is weak and poorly trained.

So what was an alternative. A Russia china USSA alliance to destroy ISLAM... a global cancer.... dont tell me about peaceful muslims... jihad is their religion... a religion of death.

Cutter's picture

Article is correct, but missed China's interest in using its ties to Russia to access the opening arctic. Russia has made big moves into the arctic and China wants a piece.  

History books will have entire chapters destroying the neocons and war party for policies that essentially pushed the world's other two great military powers together.  Colossally stupid.

magnetosphere's picture

did saudi usa force qatar to sell the rosneft stake??