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DJW001
kookoos
DJW001
reply to post by renden
China already offered to buy all the gas, that's why it's called market economy, and it's up to Russians to decide whom to sell to, and at what prices.
Wrong. It is up to the buyer to decide what they are willing to pay. China will bid very low, since the West will not be buying at all. Russia's economy is collapsing, all thanks to Putin.
It is up to both to haggle it out actually.
True, but since there are other sources for natural gas, it is a buyer's market.
For years, China's oil companies PetroChina (NYSE: PTR ) , Sinopec (NYSE: SNP ) , and CNOOC (NYSE: CEO ) have had a major advantage over their integrated major peers, which flummoxed competing oil companies. This advantage has allowed them to gobble up oil and gas assets around the world at premiums well above market price. Unfortunately for these Chinese companies, it looks like this advantage is ending, and they will need to compete with the rest of the world's oil and gas producers for assets. Let's look at what this advantage was, why it may no longer be there, and what this could mean for the energy markets.
Shopping with no credit limit
All three of these publicly traded companies -- and just about every Chinese company dealing with natural resources, for that matter -- are beholden to two opposing masters. Not only are they accountable to their shareholders, but they also have ties to the national government that "encourage" them to act in the best interest of the state. This dual identity gives these companies some very distinct advantages in the global markets, but some disadvantages when it comes to investment.
These three Chinese energy companies have access to cheap capital through loans with extremely low interest rates. For perspective, ExxonMobil (NYSE: XOM ) is one of only four companies in the world to hold a AAA credit rating from Standard & Poor's. That credit rating is even better than both the United States and Chinese governments. All three Chinese companies enjoy considerably lower interest rates on their senior notes.
•2011: Sinopec buys Canadian producer Daylight Energy for $2.1 billion, a 44% premium to market cost.
•2012: CNOOC buys Canadian producer Nexen for $15.1 billion, a 61% premium.
•2013: Sinopec buys 40% working interest in Permian basin with Pioneer Natural Resources for $1.7 billion, a 40% premium.
Curious what the fate of the petrodollar is? Look no farther than this Interfax update blasted moments ago by Bloomberg: "Gazprom Considers 'Symbolic' Yuan Bond Issue, Interfax Says."
Bloomberg adds that the gas giant is considering proposals from potential organizers to market bonds in yuan, Interfax reports, citing people with knowledge of the matter.
Gazprom unlikely be able to gain more than $300m due to mkt volume, newswire reports
No mandates, deal timeline yet
Issue may add new investors, become a “topical” public relations act amid tensions with U.S., EU
Well, yes. It's called "symbolic" for a reason. More importantly, it is a symbol of what happens when one can "create" money de novo without the presence of the world's increasingly defunct reserve currency, either secured by gas or by future cash flows, i.e., unsecured.
cosmonova
Well it is happening in Odessa now as well.
Massive protests against current government and fascism, celebration of the 70th anniversary of the liberation of Odessa from Nazis.
And not a single Ukrainian flag.
www.youtube.com...edit on 10-4-2014 by cosmonova because: (no reason given)
DJW001
reply to post by renden
China already offered to buy all the gas, that's why it's called market economy, and it's up to Russians to decide whom to sell to, and at what prices.
Wrong. It is up to the buyer to decide what they are willing to pay. China will bid very low, since the West will not be buying at all. Russia's economy is collapsing, all thanks to Putin.
Russia And China About To Sign "Holy Grail" Gas Deal
Several weeks ago we reported that in response to ongoing alienation of Russia by the west Putin was aggressively setting the stage for Russia's eastward expansion, set to culminate with a "holy grail" gas deal with China. We said that "while Europe is furiously scrambling to find alternative sources of energy should Gazprom pull the plug on natgas exports to Germany and Europe (the imminent surge in Ukraine gas prices by 40% is probably the best indication of what the outcome would be), Russia is preparing the announcement of the "Holy Grail" energy deal with none other than China, a move which would send geopolitical shockwaves around the world and bind the two nations in a commodity-backed axis."
Reuters added, reflecting on the recent trip of Rosneft executive chairman to Asia, that "the underlying message from the head of Russia's biggest oil company, Rosneft, was clear: If Europe and the United States isolate Russia, Moscow will look East for new business, energy deals, military contracts and political alliances. The Holy Grail for Moscow is a natural gas supply deal with China that is apparently now close after years of negotiations. If it can be signed when Putin visits China in May, he will be able to hold it up to show that global power has shifted eastwards and he does not need the West."
It's time for an update. According to Itar-Tass, "Russia's Gazprom and China are poised to conclude a gas supply contract in coming weeks, the first in a series of energy projects planned between the two countries. "We’re working now to sign a gas contract in May," said Deputy Prime Minister Arkady Dvorkovich. "Consultations are continuing and Gazprom's leaders are holding talks with Chinese partners on the contract terms. We hope to conclude the contract in May and believe it should come into effect by the year end."
renden
DJW001
reply to post by renden
China already offered to buy all the gas, that's why it's called market economy, and it's up to Russians to decide whom to sell to, and at what prices.
Wrong. It is up to the buyer to decide what they are willing to pay. China will bid very low, since the West will not be buying at all. Russia's economy is collapsing, all thanks to Putin.
Really? So were do you get your information from, the "opinion shopping mall"?
www.zerohedge.com...
Russia And China About To Sign "Holy Grail" Gas Deal
Several weeks ago we reported that in response to ongoing alienation of Russia by the west Putin was aggressively setting the stage for Russia's eastward expansion, set to culminate with a "holy grail" gas deal with China. We said that "while Europe is furiously scrambling to find alternative sources of energy should Gazprom pull the plug on natgas exports to Germany and Europe (the imminent surge in Ukraine gas prices by 40% is probably the best indication of what the outcome would be), Russia is preparing the announcement of the "Holy Grail" energy deal with none other than China, a move which would send geopolitical shockwaves around the world and bind the two nations in a commodity-backed axis."
Reuters added, reflecting on the recent trip of Rosneft executive chairman to Asia, that "the underlying message from the head of Russia's biggest oil company, Rosneft, was clear: If Europe and the United States isolate Russia, Moscow will look East for new business, energy deals, military contracts and political alliances. The Holy Grail for Moscow is a natural gas supply deal with China that is apparently now close after years of negotiations. If it can be signed when Putin visits China in May, he will be able to hold it up to show that global power has shifted eastwards and he does not need the West."
It's time for an update. According to Itar-Tass, "Russia's Gazprom and China are poised to conclude a gas supply contract in coming weeks, the first in a series of energy projects planned between the two countries. "We’re working now to sign a gas contract in May," said Deputy Prime Minister Arkady Dvorkovich. "Consultations are continuing and Gazprom's leaders are holding talks with Chinese partners on the contract terms. We hope to conclude the contract in May and believe it should come into effect by the year end."
DJW001
reply to post by renden
Do you have a Ukrainian source that can confirm any of this, or are you simply going to believe everything the Russian government controlled press tells you?
renden
DJW001
reply to post by renden
Do you have a Ukrainian source that can confirm any of this, or are you simply going to believe everything the Russian government controlled press tells you?
Have at it;
www.segodnya.ua...
www.profinews.com.ua...
The magic of internet...
DJW001
renden
DJW001
reply to post by renden
China already offered to buy all the gas, that's why it's called market economy, and it's up to Russians to decide whom to sell to, and at what prices.
Wrong. It is up to the buyer to decide what they are willing to pay. China will bid very low, since the West will not be buying at all. Russia's economy is collapsing, all thanks to Putin.
Really? So were do you get your information from, the "opinion shopping mall"?
www.zerohedge.com...
Russia And China About To Sign "Holy Grail" Gas Deal
Several weeks ago we reported that in response to ongoing alienation of Russia by the west Putin was aggressively setting the stage for Russia's eastward expansion, set to culminate with a "holy grail" gas deal with China. We said that "while Europe is furiously scrambling to find alternative sources of energy should Gazprom pull the plug on natgas exports to Germany and Europe (the imminent surge in Ukraine gas prices by 40% is probably the best indication of what the outcome would be), Russia is preparing the announcement of the "Holy Grail" energy deal with none other than China, a move which would send geopolitical shockwaves around the world and bind the two nations in a commodity-backed axis."
Reuters added, reflecting on the recent trip of Rosneft executive chairman to Asia, that "the underlying message from the head of Russia's biggest oil company, Rosneft, was clear: If Europe and the United States isolate Russia, Moscow will look East for new business, energy deals, military contracts and political alliances. The Holy Grail for Moscow is a natural gas supply deal with China that is apparently now close after years of negotiations. If it can be signed when Putin visits China in May, he will be able to hold it up to show that global power has shifted eastwards and he does not need the West."
It's time for an update. According to Itar-Tass, "Russia's Gazprom and China are poised to conclude a gas supply contract in coming weeks, the first in a series of energy projects planned between the two countries. "We’re working now to sign a gas contract in May," said Deputy Prime Minister Arkady Dvorkovich. "Consultations are continuing and Gazprom's leaders are holding talks with Chinese partners on the contract terms. We hope to conclude the contract in May and believe it should come into effect by the year end."
Where does it say that China is willing to pay more for gas than Europe? They are in a position to bid much, much less and Russia will have no choice but to accept China's terms... or lose yet another customer.
Xcathdra
reply to post by dragonridr
By doing that Russia has also weakened their own position on their actions in Crimea.
If Crimea was "Independent" as claimed, there would be no need to return those items back to the Ukraine government. Since they are they have acknowledged Ukraine controlled Crimea and that the Crimean government had no authority over the bases / military items on the peninsula nor did they have the authority to invite Russia in.
renden
DJW001
reply to post by renden
China already offered to buy all the gas, that's why it's called market economy, and it's up to Russians to decide whom to sell to, and at what prices.
Wrong. It is up to the buyer to decide what they are willing to pay. China will bid very low, since the West will not be buying at all. Russia's economy is collapsing, all thanks to Putin.
Really? So were do you get your information from, the "opinion shopping mall"?
www.zerohedge.com...
Russia And China About To Sign "Holy Grail" Gas Deal
Several weeks ago we reported that in response to ongoing alienation of Russia by the west Putin was aggressively setting the stage for Russia's eastward expansion, set to culminate with a "holy grail" gas deal with China. We said that "while Europe is furiously scrambling to find alternative sources of energy should Gazprom pull the plug on natgas exports to Germany and Europe (the imminent surge in Ukraine gas prices by 40% is probably the best indication of what the outcome would be), Russia is preparing the announcement of the "Holy Grail" energy deal with none other than China, a move which would send geopolitical shockwaves around the world and bind the two nations in a commodity-backed axis."
Reuters added, reflecting on the recent trip of Rosneft executive chairman to Asia, that "the underlying message from the head of Russia's biggest oil company, Rosneft, was clear: If Europe and the United States isolate Russia, Moscow will look East for new business, energy deals, military contracts and political alliances. The Holy Grail for Moscow is a natural gas supply deal with China that is apparently now close after years of negotiations. If it can be signed when Putin visits China in May, he will be able to hold it up to show that global power has shifted eastwards and he does not need the West."
It's time for an update. According to Itar-Tass, "Russia's Gazprom and China are poised to conclude a gas supply contract in coming weeks, the first in a series of energy projects planned between the two countries. "We’re working now to sign a gas contract in May," said Deputy Prime Minister Arkady Dvorkovich. "Consultations are continuing and Gazprom's leaders are holding talks with Chinese partners on the contract terms. We hope to conclude the contract in May and believe it should come into effect by the year end."
The key sticking point remains the price: "Base price is the only problem to be solved,” Dvorkovich said on Wednesday at a session of a Russia-China intergovernmental commission on energy co-operation, co-chaired by Chinese Vice-Premier Zhang Gaoli." However, even if Russia concedes the topline to China, it will surely "more than make up for it in volume" to borrow a line from Amazon, and furthermore the geopolitical implications from such a deal, not to mention the increase in national leverage vis-a-vis its dealings with Europe and the West, will more than make up for any immediately revenue shortfalls.
renden
DJW001
renden
DJW001
reply to post by renden
China already offered to buy all the gas, that's why it's called market economy, and it's up to Russians to decide whom to sell to, and at what prices.
Wrong. It is up to the buyer to decide what they are willing to pay. China will bid very low, since the West will not be buying at all. Russia's economy is collapsing, all thanks to Putin.
Really? So were do you get your information from, the "opinion shopping mall"?
www.zerohedge.com...
Russia And China About To Sign "Holy Grail" Gas Deal
Several weeks ago we reported that in response to ongoing alienation of Russia by the west Putin was aggressively setting the stage for Russia's eastward expansion, set to culminate with a "holy grail" gas deal with China. We said that "while Europe is furiously scrambling to find alternative sources of energy should Gazprom pull the plug on natgas exports to Germany and Europe (the imminent surge in Ukraine gas prices by 40% is probably the best indication of what the outcome would be), Russia is preparing the announcement of the "Holy Grail" energy deal with none other than China, a move which would send geopolitical shockwaves around the world and bind the two nations in a commodity-backed axis."
Reuters added, reflecting on the recent trip of Rosneft executive chairman to Asia, that "the underlying message from the head of Russia's biggest oil company, Rosneft, was clear: If Europe and the United States isolate Russia, Moscow will look East for new business, energy deals, military contracts and political alliances. The Holy Grail for Moscow is a natural gas supply deal with China that is apparently now close after years of negotiations. If it can be signed when Putin visits China in May, he will be able to hold it up to show that global power has shifted eastwards and he does not need the West."
It's time for an update. According to Itar-Tass, "Russia's Gazprom and China are poised to conclude a gas supply contract in coming weeks, the first in a series of energy projects planned between the two countries. "We’re working now to sign a gas contract in May," said Deputy Prime Minister Arkady Dvorkovich. "Consultations are continuing and Gazprom's leaders are holding talks with Chinese partners on the contract terms. We hope to conclude the contract in May and believe it should come into effect by the year end."
Where does it say that China is willing to pay more for gas than Europe? They are in a position to bid much, much less and Russia will have no choice but to accept China's terms... or lose yet another customer.
Wow, I got no comment to that, because you apparently have a secret source inside their negotiation table, source that provides you with actual negotiated contract figures.
Pleas do tell, how much are Chinese willing, and not willing to pay?
That's while completely ignoring the very title is "Russia And China About To Sign "Holy Grail" Gas Deal".
According to your logic that Holy Grail of the deal is a lot worse then the current European deal, which must be something so much more massively better then the Holy Grail, that us mere mortals can't even conceive of its greatness.
Xcathdra
reply to post by MessageforAll
Nothing quite like re-arranging decks chairs on the titanic.