A small Chinese energy firm has signed a deal with a state-controlled Russian oil company to invest in an East Siberian oilfield project.
CEFC China Energy signed the deal with Gazprom Neft, the oil arm of Russia’s top natural gas producer, on July 6, according to a statement on the Shanghai-based company’s website.
The private chemicals and fuel company said it is investing in three blocks holding 1.9 billion barrels of oil in the Baikal project, 90 kilometres away from the East Siberia-Pacific Ocean (ESPO) pipeline that supplies China with Russian oil.
CEFC said that the blocks were also near the Power of Siberia gas pipeline, for which Chinese construction began in June.
“The three blocks…have an excellent geographical advantage for supplying oil to our country,” CEFC China Energy said in the statement dated July 6.
The company has been beefing up its oil business to get ready for more open domestic oil markets, hiring trading managers from state energy giants, building storage tanks and looking to invest in oilfields.
Earlier this week, Chinese regulators granted an independent refinery approval to import 7.5 million tonnes of crude oil a year for the first time under new rules allowing more private participation in a sector long dominated by state oil giants.
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