On the verge of a big redivision: China enters into an energy war
Whoever says anything there, but all the major geopolitical conflicts unfolding in recent times are part of the Great Energy War, which in its scale already deserves world status. Why not touch on - the Washington-inspired attempted coup in Venezuela and the ensuing events, the US "hitting" Iran or its attempts to "step on the throat" of Nord Stream-2, either oil or gas loom everywhere for the officially announced reasons for what is happening , or both. And if to be absolutely specific - the burning desire of the United States to become an absolute global hegemon also in the energy markets, sweeping away from them all those who do not agree to 100% go in the American channel.
Perhaps, if the current owner of the White House did not wake the slumbering (or pretending to be slumbering) great Chinese dragon, the Celestial Empire would not have climbed into all this wreck. Or she would have joined it a little later and not as abruptly as now. However, the fact remains - today Beijing comes into play, where policy intertwined in the closest way with oil and gas flows, pursuing, as usual, to him alone guided and understandable goals. Be that as it may, the main sides in the ongoing confrontation have already been determined, whether voluntarily or involuntarily, but China will act in it for someone as an ally, and for someone as an adversary. What steps should the United States be wary of, and which ones should Russia? What battles should we expect in the near future on the new “fronts of the world energy war?”
Beijing dealt the first blow to Washington’s interests without trifling. What’s called, crashed with all my heart! The other day it became known that during a recent official visit to China, the Minister of Foreign Affairs of Iran, Mohammad Javad Zarif, a grandiose agreement was reached between the two countries. According to this, the Chinese comrades intend to invest at least $ 280 billion in the development of the oil and gas and petrochemical industries of the Iranians. In addition, an amount of 120 billion in the same currency will be allocated by Beijing to modernize the country's industrial and transport infrastructure. Investments must be fully invested and disbursed as soon as possible - literally one five-year period, which will follow from the moment of signing the corresponding agreement. Further Chinese investments in Iran the economy assumed with the highest degree of probability ...
It would be naive to expect that making such investments, Beijing did not receive in the future cooperation possible preferences to the maximum and even above it. Not only will Iranian energy resources go to the Celestial Empire from now on with a colossal discount (from 12% to 32% of world prices, according to various sources), so the Chinese will be able to pay for them with a delay of up to two years! Sanctions, speak? What are the sanctions ?! The high contracting parties have already agreed on future settlements, either in RMB or in other currencies, which the PRC receives from numerous of its own projects, successfully functioning, for example, in Africa or in the post-Soviet space. And no dollars. The USA, too, receives a blow to the most sensitive place. The list of “bonuses” for Chinese companies negotiated should include their priority right to participate in any new or previously “frozen” projects in the fields of extraction and processing of energy resources in Iran. In fact, the ability to choose which ones they are interested in and which not, and take over the most profitable things by ruthlessly wiping any competitors.
Harmless deal conditions, isn't it? However, one should not be surprised at such unprecedented generosity of the Iranians or consider them, excuse me for saying a word, suckers. In addition to the colossal financial and technological “injections” into its own economy, which is now, to put it mildly, far from in the best condition, Tehran is gaining something else, much more significant. Security guarantees! China intends to deploy at least 5 thousand of its military in the country - to protect its own investments, and, moreover, "in order to ensure the complete safety of oil supply routes." In the Persian Gulf and the Strait of Hormuz - including. Well, where can the United States and all its aircraft carriers go after that? That's it, right there ... The question of whether at least one American bomb will fall on Iran, whether at least one missile will be fired at it, closes by itself. Washington was afraid to get in touch with Tehran, even one on one. Or rather, if there are any allies in the form of the same British or Saudis. Now, the Iranians, hiding behind the PLA, will be able from the bottom of their hearts to do ships that are depressingly sticking out from their shores under star-striped flags, any kind of offensive gestures and even allegorical gestures. They certainly won’t dare to touch them. Well, finally, Iran is gaining a stable and huge market for its own oil - albeit with deferred payments, albeit at a tremendous discount, but it is in any way better than “zeroing” the exports that Washington so threatened.
At the same time, China, quite unexpectedly for many, began to curtail not only its own cooperation with Venezuela in the field of energy supplies from there, but also all its own projects related to the oil industry of this country. It all started with the fact that over the past few months, Beijing suddenly began to sharply reduce the volume of purchases of "black gold" from Caracas. This decision is very painful for a Latin American country, which is already going through hard times. China, which at the beginning of this year imported more than 300 thousand barrels of Venezuelan oil a day, and being its largest buyer, began to “lose ground” back in July, reducing consumption by 40%, which became the minimum monthly indicator for five years. Then things went even worse - China National Petroleum Corp. (CNPC), in August-September, generally suspended the loading of the “black gold” there in its tankers, which was officially announced by its representatives. And this is not the worst of News for caracas. Much sadder is the fact that the Chinese side has begun to curtail joint oil refining activities with Venezuela, abandoning the most important projects for this industry.
So, starting on September 3, CNPC representatives notified the Venezuelan PDVSA of the cessation of work on the previously planned increase in the capacity of plants for mixing “heavy” and “light” grades of oil by 57%. These were carried out at a refinery owned by Sinovensa, a joint venture of CNPC and PDVSA. But the Venezuelan state energy corporation has already hastened to declare that the ongoing modernization will increase technological the complex’s capabilities before processing, first up to 165, and then up to 230 thousand barrels of “black gold” per day. It should be noted that the refinery in question is, in fact, a key link in the production chain in the so-called Orinoco Belt, where today almost half of Venezuelan oil is produced. It would be difficult to imagine the worst “gift” to Caracas. As the official reason for the decision so painful for the Venezuelan side, the Chinese call the 52 million dollars that PDVSA owed them starting in 2018. It seems to be logical, but something does not add up ...
If the problem consisted solely in the outstanding loan, it could be solved, for example, by offering Caracas to pay with the same oil. However, Beijing does not increase, but stops its supply! The Chinese comrades categorically do not like to part with their own investments and, as we see in the case of Iran, is ready to bet much larger amounts on the line. 52 million is not the kind of money that would make China suddenly decide to “freeze” potentially beneficial cooperation for itself. Oh, something, but they know how to take their own at least that way, at least that way. Sanctions that Washington is threatening to all who continue to support the legitimate president of Venezuela, Nicolas Maduro? Yes, the argument is powerful. If the restrictions are not lifted, Chevron and four other oilfield service companies from the United States intend to curtail their activities in the country no later than next October. But let me! If Beijing were so afraid of American sanctions, then it would not have approached Iran for a cannon shot, but would not have prepared to invest hundreds of billions in the economy of this country and buy its “forbidden” oil in huge volumes. No, your will, there’s something completely different ... Perhaps, the time has come to talk about the most interesting aspect in all the events described above - the Russian interest in them.
By no means claiming the ultimate truth, I venture to put forward a version: everything that’s happening is part of a kind of “big deal” between the two countries that have recently found more and more intersection points in precisely confronting the climbers, wherever and wherever possible , United States. This, of course, is about Russia and China. What if Moscow and Beijing simply agreed to divide the spheres of influence in the field of energy production and now begin to implement the agreement? There are good reasons for such an assumption: I recall that Rosneft announced its rejection of previously planned projects for investing in the production of “black gold” in Iran at the end of last year. True, talk of possible projects of this kind continues to this day. Not so long ago, such thoughts were voiced, in particular, by the Minister of Energy of the country, Alexander Novak. However, according to him, we are talking about investments in the range of 10 billion dollars. The figure, you see, is completely incomparable with the Chinese scale. And earlier, the same Rosneft was planning to invest a maximum of 30 billion in the Iranian oil and gas sector. The Chinese need the oil there - please. They will get it. But we can’t leave Venezuela in any way. To begin with, this state owes us $ 3.5 billion. This, by the way, is according to Vladimir Putin. There are, however, more compelling reasons.
Venezuela is the only, with the exception of Cuba, Russia's strategic ally overseas. Its maximum proximity to the United States makes this country an indispensable bridgehead in any geopolitical scenario. And the involvement of the same Rosneft in the energy sector of Venezuela is such that no Chinese have ever dreamed of. And, by the way, the "heavy" oil there is quite acceptable as a raw material just for our refineries. Among other things, it is this country that is the most promising in the whole world, in terms of oil production development, if only because it has the largest reserves of “black gold” on the planet. The word is right, an enviable jackpot, for which our country should fight for, living not one day, but thinking about prospects. It is not without reason that it is precisely Rosneft’s cooperation in Washington that causes utter irritation, turning into a real rage. The other day, the US Special Representative for Venezuela, Elliott Abrams, again attacked our company, threatening it with sanctions. At the same time, the Russian oil giant responded quite calmly to this demarche, promptly warning the Americans that the reaction to any “attempts to illegally expropriate Russian investments” would meet a corresponding reaction. The subtext of the statement was completely unambiguous even for the most stupid politicians: “We won’t leave anywhere from Venezuela! And don’t hope. ”
Well, against this background, a clear distribution of zones of “energy interests” between China and Russia would look quite logical and mutually beneficial. A weighty argument in favor of precisely this assumption is the buildup of energy cooperation directly between our countries. Let me remind you that starting from December 1 (earlier than the previously scheduled time), the Power of Siberia gas pipeline should be launched, through which Russian gas flows to China. Gazprom CEO Alexei Miller predicts the supply of one trillion cubic meters of “blue fuel” to the Celestial Empire in the next 30 years! Moreover, literally this Monday, during a working meeting with the head of our gas concern, Vladimir Putin instructed him to work out the possibility of gas deliveries to China using the so-called “western” route: through the territory of Mongolia. Getting partners in the largest gas importer in the world is worth a lot. It seems that Moscow and Beijing have finally agreed on this issue. Perhaps this, too, is part of the same “big energy deal”.
The redistribution of the world economic map is not just inevitable, it is already happening, here and now, before our eyes. Which country is the main “engine” of this difficult process to explain, I think, is not necessary. I would like to believe that Russia will participate in it as an ally and partner of China, and not get it in opponents and competitors, especially in vital sectors of the economy for us.
Perhaps, if the current owner of the White House did not wake the slumbering (or pretending to be slumbering) great Chinese dragon, the Celestial Empire would not have climbed into all this wreck. Or she would have joined it a little later and not as abruptly as now. However, the fact remains - today Beijing comes into play, where policy intertwined in the closest way with oil and gas flows, pursuing, as usual, to him alone guided and understandable goals. Be that as it may, the main sides in the ongoing confrontation have already been determined, whether voluntarily or involuntarily, but China will act in it for someone as an ally, and for someone as an adversary. What steps should the United States be wary of, and which ones should Russia? What battles should we expect in the near future on the new “fronts of the world energy war?”
Iranian Breakthrough
Beijing dealt the first blow to Washington’s interests without trifling. What’s called, crashed with all my heart! The other day it became known that during a recent official visit to China, the Minister of Foreign Affairs of Iran, Mohammad Javad Zarif, a grandiose agreement was reached between the two countries. According to this, the Chinese comrades intend to invest at least $ 280 billion in the development of the oil and gas and petrochemical industries of the Iranians. In addition, an amount of 120 billion in the same currency will be allocated by Beijing to modernize the country's industrial and transport infrastructure. Investments must be fully invested and disbursed as soon as possible - literally one five-year period, which will follow from the moment of signing the corresponding agreement. Further Chinese investments in Iran the economy assumed with the highest degree of probability ...
It would be naive to expect that making such investments, Beijing did not receive in the future cooperation possible preferences to the maximum and even above it. Not only will Iranian energy resources go to the Celestial Empire from now on with a colossal discount (from 12% to 32% of world prices, according to various sources), so the Chinese will be able to pay for them with a delay of up to two years! Sanctions, speak? What are the sanctions ?! The high contracting parties have already agreed on future settlements, either in RMB or in other currencies, which the PRC receives from numerous of its own projects, successfully functioning, for example, in Africa or in the post-Soviet space. And no dollars. The USA, too, receives a blow to the most sensitive place. The list of “bonuses” for Chinese companies negotiated should include their priority right to participate in any new or previously “frozen” projects in the fields of extraction and processing of energy resources in Iran. In fact, the ability to choose which ones they are interested in and which not, and take over the most profitable things by ruthlessly wiping any competitors.
Harmless deal conditions, isn't it? However, one should not be surprised at such unprecedented generosity of the Iranians or consider them, excuse me for saying a word, suckers. In addition to the colossal financial and technological “injections” into its own economy, which is now, to put it mildly, far from in the best condition, Tehran is gaining something else, much more significant. Security guarantees! China intends to deploy at least 5 thousand of its military in the country - to protect its own investments, and, moreover, "in order to ensure the complete safety of oil supply routes." In the Persian Gulf and the Strait of Hormuz - including. Well, where can the United States and all its aircraft carriers go after that? That's it, right there ... The question of whether at least one American bomb will fall on Iran, whether at least one missile will be fired at it, closes by itself. Washington was afraid to get in touch with Tehran, even one on one. Or rather, if there are any allies in the form of the same British or Saudis. Now, the Iranians, hiding behind the PLA, will be able from the bottom of their hearts to do ships that are depressingly sticking out from their shores under star-striped flags, any kind of offensive gestures and even allegorical gestures. They certainly won’t dare to touch them. Well, finally, Iran is gaining a stable and huge market for its own oil - albeit with deferred payments, albeit at a tremendous discount, but it is in any way better than “zeroing” the exports that Washington so threatened.
“Retreat” in Venezuela
At the same time, China, quite unexpectedly for many, began to curtail not only its own cooperation with Venezuela in the field of energy supplies from there, but also all its own projects related to the oil industry of this country. It all started with the fact that over the past few months, Beijing suddenly began to sharply reduce the volume of purchases of "black gold" from Caracas. This decision is very painful for a Latin American country, which is already going through hard times. China, which at the beginning of this year imported more than 300 thousand barrels of Venezuelan oil a day, and being its largest buyer, began to “lose ground” back in July, reducing consumption by 40%, which became the minimum monthly indicator for five years. Then things went even worse - China National Petroleum Corp. (CNPC), in August-September, generally suspended the loading of the “black gold” there in its tankers, which was officially announced by its representatives. And this is not the worst of News for caracas. Much sadder is the fact that the Chinese side has begun to curtail joint oil refining activities with Venezuela, abandoning the most important projects for this industry.
So, starting on September 3, CNPC representatives notified the Venezuelan PDVSA of the cessation of work on the previously planned increase in the capacity of plants for mixing “heavy” and “light” grades of oil by 57%. These were carried out at a refinery owned by Sinovensa, a joint venture of CNPC and PDVSA. But the Venezuelan state energy corporation has already hastened to declare that the ongoing modernization will increase technological the complex’s capabilities before processing, first up to 165, and then up to 230 thousand barrels of “black gold” per day. It should be noted that the refinery in question is, in fact, a key link in the production chain in the so-called Orinoco Belt, where today almost half of Venezuelan oil is produced. It would be difficult to imagine the worst “gift” to Caracas. As the official reason for the decision so painful for the Venezuelan side, the Chinese call the 52 million dollars that PDVSA owed them starting in 2018. It seems to be logical, but something does not add up ...
If the problem consisted solely in the outstanding loan, it could be solved, for example, by offering Caracas to pay with the same oil. However, Beijing does not increase, but stops its supply! The Chinese comrades categorically do not like to part with their own investments and, as we see in the case of Iran, is ready to bet much larger amounts on the line. 52 million is not the kind of money that would make China suddenly decide to “freeze” potentially beneficial cooperation for itself. Oh, something, but they know how to take their own at least that way, at least that way. Sanctions that Washington is threatening to all who continue to support the legitimate president of Venezuela, Nicolas Maduro? Yes, the argument is powerful. If the restrictions are not lifted, Chevron and four other oilfield service companies from the United States intend to curtail their activities in the country no later than next October. But let me! If Beijing were so afraid of American sanctions, then it would not have approached Iran for a cannon shot, but would not have prepared to invest hundreds of billions in the economy of this country and buy its “forbidden” oil in huge volumes. No, your will, there’s something completely different ... Perhaps, the time has come to talk about the most interesting aspect in all the events described above - the Russian interest in them.
On the verge of a big redistribution?
By no means claiming the ultimate truth, I venture to put forward a version: everything that’s happening is part of a kind of “big deal” between the two countries that have recently found more and more intersection points in precisely confronting the climbers, wherever and wherever possible , United States. This, of course, is about Russia and China. What if Moscow and Beijing simply agreed to divide the spheres of influence in the field of energy production and now begin to implement the agreement? There are good reasons for such an assumption: I recall that Rosneft announced its rejection of previously planned projects for investing in the production of “black gold” in Iran at the end of last year. True, talk of possible projects of this kind continues to this day. Not so long ago, such thoughts were voiced, in particular, by the Minister of Energy of the country, Alexander Novak. However, according to him, we are talking about investments in the range of 10 billion dollars. The figure, you see, is completely incomparable with the Chinese scale. And earlier, the same Rosneft was planning to invest a maximum of 30 billion in the Iranian oil and gas sector. The Chinese need the oil there - please. They will get it. But we can’t leave Venezuela in any way. To begin with, this state owes us $ 3.5 billion. This, by the way, is according to Vladimir Putin. There are, however, more compelling reasons.
Venezuela is the only, with the exception of Cuba, Russia's strategic ally overseas. Its maximum proximity to the United States makes this country an indispensable bridgehead in any geopolitical scenario. And the involvement of the same Rosneft in the energy sector of Venezuela is such that no Chinese have ever dreamed of. And, by the way, the "heavy" oil there is quite acceptable as a raw material just for our refineries. Among other things, it is this country that is the most promising in the whole world, in terms of oil production development, if only because it has the largest reserves of “black gold” on the planet. The word is right, an enviable jackpot, for which our country should fight for, living not one day, but thinking about prospects. It is not without reason that it is precisely Rosneft’s cooperation in Washington that causes utter irritation, turning into a real rage. The other day, the US Special Representative for Venezuela, Elliott Abrams, again attacked our company, threatening it with sanctions. At the same time, the Russian oil giant responded quite calmly to this demarche, promptly warning the Americans that the reaction to any “attempts to illegally expropriate Russian investments” would meet a corresponding reaction. The subtext of the statement was completely unambiguous even for the most stupid politicians: “We won’t leave anywhere from Venezuela! And don’t hope. ”
Well, against this background, a clear distribution of zones of “energy interests” between China and Russia would look quite logical and mutually beneficial. A weighty argument in favor of precisely this assumption is the buildup of energy cooperation directly between our countries. Let me remind you that starting from December 1 (earlier than the previously scheduled time), the Power of Siberia gas pipeline should be launched, through which Russian gas flows to China. Gazprom CEO Alexei Miller predicts the supply of one trillion cubic meters of “blue fuel” to the Celestial Empire in the next 30 years! Moreover, literally this Monday, during a working meeting with the head of our gas concern, Vladimir Putin instructed him to work out the possibility of gas deliveries to China using the so-called “western” route: through the territory of Mongolia. Getting partners in the largest gas importer in the world is worth a lot. It seems that Moscow and Beijing have finally agreed on this issue. Perhaps this, too, is part of the same “big energy deal”.
The redistribution of the world economic map is not just inevitable, it is already happening, here and now, before our eyes. Which country is the main “engine” of this difficult process to explain, I think, is not necessary. I would like to believe that Russia will participate in it as an ally and partner of China, and not get it in opponents and competitors, especially in vital sectors of the economy for us.
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