April 22, 2016 [Forbes] - Anyday now we will hear that all that metal China is mining isn’t really designed for job creation and dumping steel into the world, it’s for building oil storage tanks.
With a world awash in crude, China’s state owned oil giant CNPC is looking to become a major shareholder in Rosneft to have access to more of it. For those who don’t know, Rosneft is Russia’s biggest oil producer.
The company had a joint venture with ExxonMobil a while back in the Kara Sea, but Washington put a stop to it because of sanctions in retaliation for Russian involvement in Ukrainian politics.
Meanwhile, the Chinese are hoping to bankroll the Russian company as it opens more of its shares to the market. Ironically, Rosneft will go from being a majority Russian state owned enterprise to a majority Russia and Chinese owned one.
Russia’s First Deputy Energy Minister Alexei Teksler said China’s National Petroleum Corporation (CNPC) was interested in Russia’s privatization plan.
China said the same. “Yes, we are considering this,” CNPC’s Wang Zhongcai reportedly said, adding that the company is conducting their due diligence on the deal.
Under the state privatization plan, Rosneft is expected to privatize 19.5% of its state shares this year. The Russian government currently owns 69.5% of Rosneft, with the rest of the shares free-floating in the market.