Russia signs US$85b deal to supply oil to China, and agrees gas price formula

China agrees to buy fuel shipments worth US$85 billion over 10 years, and neighbours agree on greater co-operation in global affairs

PUBLISHED : Tuesday, 22 October, 2013, 8:27pm
UPDATED : Wednesday, 23 October, 2013, 11:56am

Chinese and Russian leaders called for greater co-operation in global affairs and energy as Moscow signed an US$85 billion deal to supply oil to Beijing.

Russian Prime Minister Dmitry Medvedev, leading a heavyweight delegation that included Energy Minister Alexander Novak as well as the heads of the country's top oil and gas producers, arrived in Beijing yesterday for a two-day visit.

President Xi Jinping told Medvedev that both countries were good neighbours and strategic partners "in name and in essence", Xinhua reported.

Xi said both sides had safeguarded common interests and justice in regional and global affairs.

"Both countries should continue to enhance strategic co-ordination, maintain the authority of the United Nations and its Security Council, and safeguard the purposes and principles of the UN Charter and … the basic norms governing international relations, to jointly promote world peace, stability and development," Xinhua reported Xi as saying.

Medvedev said the giant neighbours enjoyed broad common interests and their continued co-operation was of significance to world peace.

Speaking after meeting with Medvedev, Premier Li Keqiang said both sides had reached an important new agreement on boosting bilateral, pragmatic co-operation, in particular on large projects, Xinhua reported.

"Bilateral relations have never reached such high levels," Medvedev said. "It is a good thing because we are neighbours."

The two premiers witnessed the signing of 21 bilateral co-operation agreements.

Medvedev said in an online discussion with Chinese internet users that Russia's biggest oil producer, Rosneft, would supply 70 million barrels of crude oil a year for 10 years.

"The agreement means 100 million tonnes over the next 10 years, worth a total of US$85 billion," Medvedev said. "It is a big sum of money for any country, even to China."

Russian energy minister Novak said Gazprom and China National Petroleum Corp had also agreed on a gas pricing formula with a view to supplying 38 billion cubic metres of Russian gas per year.

The gas price itself, the most important stumbling block in contract talks that have dragged on for years, had yet to be agreed, said a Gazprom spokesman.

In his hour-long online discussion, where questions posed by internet users were put to the prime minister by a moderator from Xinhua, Medvedev was also asked about Russia's experience with what is a hot-button issue in China - the disclosure of officials' personal and family assets to rein in corruption.

"Everybody knows the income of the [Russian] president and prime minister, their personal assets, my family's assets. I think this is a normal practice adopted around the world. There is nothing special," Medvedev was reported as saying.

Medvedev is scheduled to visit the University of Science and Technology in Hefei , in Li's home province of Anhui .

Reuters, Associated Press, Agence France-Presse