Russia could allow Chinese investors more than 50 percent of shares in strategic oil and gas fields, an official said yesterday, which emphasizes Moscow's need for foreign aid in order to develop energy resources.
And while it tightly controls the oil and gas fields that form the backbone of its economy, Russia has forged alliances with some Western companies to gain the know-how it needs to extract hard-to-reach supplies.
However, now that Western sanctions due to Moscow's role in Ukraine have completely stopped that cooperation, Russia has overcome the "psychological barrier" and is ready to deepen its economic ties with China, Deputy Prime Minister Arkady Dvorkovich said.
"We have a strategic partnership with China and now decisions are made much sooner than before." We have a gas contract, and another one will be signed soon. Now we know China better: we understand their motives and intentions," he said at a conference in the Siberian region of Krasnoyarsk.
"There used to be a psychological barrier. Now she is gone. We are interested in maximum investments in new industries. China is an obvious investor for us," he said, as reported by Reuters.
President Vladimir Putin has been pushing for closer ties with Asia since the European Union and the United States imposed sanctions on Russia last year over its role in the Ukraine conflict, sending relations to their lowest level since the Cold War.
Despite the flattery that China is the "key east", Moscow has failed to finalize a large number of deals and there is considerable caution in Asia when it comes to providing finance to Russian companies and banks. China's CNPC and Sinopek Group had investments in Russia, but only in smaller projects. CNPC has an exploration block, but so far there has been no production.
"Putin is currently in a difficult situation. We all know that. One of the ways to get out of it is to improve relations with China," a source from the Chinese oil industry told Reuters. "It was difficult for CNPC to improve cooperation in Russia under Putin. We tried several times, but it wasn't worth it. "Now the situation has changed and we have a better chance of succeeding," he said.
According to the restrictions currently in force, foreign investors can have a share of less than 50 percent in oil fields with reserves of more than 70 million tons and in gas fields with reserves of more than 50 billion cubic meters.
Most of Russia's oil production is based in western Siberia, where the fields are nearly exhausted. All new areas, such as Eastern Siberia and the Arctic and hard-to-reach resources, require the help of foreign companies.
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